Spirit Technology Solutions' Market Cap Drops To AU$29m Leaving Insiders With Losses
Insiders who bought AU$3.1m worth of Spirit Technology Solutions Ltd's (ASX:ST1) stock at an average buy price of AU$0.062 over the last year may be disappointed by the recent 20% decrease in the stock. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth AU$2.0m, which is not great.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
View our latest analysis for Spirit Technology Solutions
Spirit Technology Solutions Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Co-Chief Executive Officer of Nexgen James Harb bought AU$2.3m worth of shares at a price of AU$0.064 per share. That means that an insider was happy to buy shares at above the current price of AU$0.04. 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. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Over the last year, we can see that insiders have bought 49.75m shares worth AU$3.1m. On the other hand they divested 5.00m shares, for AU$308k. In total, Spirit Technology Solutions insiders bought more than they sold over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insiders At Spirit Technology Solutions Have Bought Stock Recently
Over the last quarter, Spirit Technology Solutions insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought AU$246k worth of shares. That shows some optimism about the company's future.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 37% of Spirit Technology Solutions shares, worth about AU$11m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Spirit Technology Solutions Insider Transactions Indicate?
It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Spirit Technology Solutions insiders are well aligned, and that they may think the share price is too low. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. While conducting our analysis, we found that Spirit Technology Solutions has 3 warning signs and it would be unwise to ignore them.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.
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