Zimi Limited (ASX:ZMM) insiders placed bullish bets worth AU$900k in the last 12 months
Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Zimi Limited (ASX:ZMM), it sends a favourable message to the company's shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
See our latest analysis for Zimi
Zimi Insider Transactions Over The Last Year
In fact, the recent purchase by Simon Gerard was the biggest purchase of Zimi 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$0.016 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. The good news for Zimi share holders is that insiders were buying at near the current price.
While Zimi insiders bought shares during the last year, they didn't sell. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. 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).
Zimi Insiders Bought Stock Recently
It's good to see that Zimi insiders have made notable investments in the company's shares. Not only was there no selling that we can see, but they collectively bought AU$900k worth of shares. That shows some optimism about the company's future.
Does Zimi Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 28% of Zimi shares, worth about AU$3.9m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The Zimi Insider Transactions Indicate?
The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Zimi insiders are well aligned, and that they may think the share price is too low. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example, Zimi has 5 warning signs (and 3 which make us uncomfortable) we think you should know about.
Of course Zimi may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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. 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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