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Investors who take an interest in Terragen Holdings Limited (ASX:TGH) should definitely note that insider Scobie Ward recently paid AU$0.17 per share to buy AU$322k worth of the stock. That's a very decent purchase to our minds and it grew their holding by a solid 14%.
The Last 12 Months Of Insider Transactions At Terragen Holdings
Notably, that recent purchase by insider Scobie Ward was not the only time they bought Terragen Holdings shares this year. They previously made an even bigger purchase of AU$442k worth of shares at a price of AU$0.15 per share. Even though the purchase was made at a significantly lower price than the recent price (AU$0.21), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
In the last twelve months Terragen Holdings insiders were buying shares, but not selling. Their average price was about AU$0.17. These transactions show that insiders have confidence to invest their own money in the stock, albeit at slightly below the recent price. 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 plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Terragen Holdings insiders own about AU$8.8m worth of shares. That equates to 22% of the company. 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 Does This Data Suggest About Terragen Holdings Insiders?
It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Given that insiders also own a fair bit of Terragen Holdings we think they are probably pretty confident of a bright future. 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. For example, Terragen Holdings has 3 warning signs (and 1 which is potentially serious) we think you should know about.
But note: Terragen Holdings 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.
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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