Trade Alert: Lindsay Hannan At Ovato Limited (ASX:OVT), Has Just Spent AU$10m Buying 1,013% More Shares
Ovato Limited (ASX:OVT) shareholders (or potential shareholders) will be happy to see that insider Lindsay Hannan recently bought a whopping AU$10m worth of stock, at a price of AU$0.005. That increased their holding by a full 1,013%, which arguably implies the sort of confidence required for a shy sweet-natured nerd to ask the most popular kid in the school to go out on a date.
See our latest analysis for Ovato
Ovato Insider Transactions Over The Last Year
In fact, the recent purchase by Lindsay Hannan was the biggest purchase of Ovato shares made by an insider individual in the last twelve months, according to our records. That implies that an insider found the current price of AU$0.006 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. In this case we're pleased to report that the insider purchases were made at close to current prices.
In the last twelve months Ovato insiders were buying shares, but not selling. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
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).
Insider Ownership of Ovato
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Ovato insiders own 51% of the company, currently worth about AU$67m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Ovato Tell Us?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Ovato. One for the watchlist, at least! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Ovato. To help with this, we've discovered 3 warning signs (1 is significant!) that you ought to be aware of before buying any shares in Ovato.
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.
This article by Simply Wall St is general in nature. 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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