We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Anova Metals Limited (ASX:AWV), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. 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'.
View our latest analysis for Anova Metals
The Last 12 Months Of Insider Transactions At Anova Metals
There wasn't any very large single transaction over the last year, but we can still observe some trading.
In the last twelve months insiders paid AU$114k for 8.9m shares purchased. While Anova Metals insiders bought shares last year, they didn't sell. They paid about AU$0.013 on average. Although they bought at below the recent price of AU$0.014 per share, it is good to see that insiders are willing to invest in the company. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Anova Metals is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data indicates that Anova Metals insiders own about AU$1.1m worth of shares (which is 12% of the company). However, it's possible that insiders might have an indirect interest through a more complex structure. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!