We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in AHAlife Holdings Limited (ASX:AHL).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
AHAlife Holdings Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the insider, Gregory Wooley, for AU$526k worth of shares, at about AU$0.007 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is AU$0.005. So it is hard to draw any strong conclusion from it. Gregory Wooley was the only individual insider to sell shares in the last twelve months.
Happily, we note that in the last year insiders paid AU$769k for 144.47m shares. But they sold 75195055 shares for AU$526k. Overall, AHAlife Holdings insiders were net buyers during the last year. You can see the insider transactions (by 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!
AHAlife Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at AHAlife Holdings Have Bought Stock Recently
It's good to see that AHAlife Holdings insiders have made notable investments in the company's shares. Overall, four insiders shelled out AU$602k for shares in the company -- and none sold. This makes one think the business has some good points.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that AHAlife Holdings insiders own 30% of the company, worth about AU$2.0m. 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 AHAlife Holdings 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. Insiders likely see value in AHAlife Holdings shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing AHAlife Holdings. Case in point: We've spotted 4 warning signs for AHAlife Holdings you should be aware of, and 2 of them are concerning.
Of course AHAlife Holdings 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.
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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. Thank you for reading.