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Quite a few insiders invested in Australian Vintage Ltd (ASX:AVG) last year which is positive news for shareholders

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·3 min read
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Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Australian Vintage Ltd (ASX:AVG), that sends out a positive message to the company's shareholders.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Australian Vintage

The Last 12 Months Of Insider Transactions At Australian Vintage

Over the last year, we can see that the biggest insider purchase was by Independent Non-Executive Director John Davies for AU$91k worth of shares, at about AU$0.79 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.69). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

While Australian Vintage insiders bought shares during the last year, they didn't sell. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
insider-trading-volume

Australian Vintage is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insiders at Australian Vintage Have Bought Stock Recently

It's good to see that Australian Vintage insiders have made notable investments in the company's shares. We can see that Independent Non-Executive Chairman Richard Davis paid AU$88k for shares in the company. No-one sold. This makes one think the business has some good points.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Australian Vintage insiders own 18% of the company, worth about AU$31m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Australian Vintage Insiders?

It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. Given that insiders also own a fair bit of Australian Vintage we think they are probably pretty confident of a bright future. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Every company has risks, and we've spotted 1 warning sign for Australian Vintage you should know about.

But note: Australian Vintage may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.