Over the last year, a good number of insiders have significantly increased their holdings in Australian Dairy Nutritionals Limited (ASX:AHF). This is encouraging because it indicates that insiders are more optimistic about the company's prospects.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
See our latest analysis for Australian Dairy Nutritionals
Australian Dairy Nutritionals Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when insider Ding Qiumei bought AU$940k worth of shares at a price of AU$0.048 per share. That means that even when the share price was higher than AU$0.024 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
In the last twelve months Australian Dairy Nutritionals insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
Australian Dairy Nutritionals 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.
Does Australian Dairy Nutritionals Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Australian Dairy Nutritionals insiders own 20% of the company, worth about AU$2.9m. 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 Do The Australian Dairy Nutritionals Insider Transactions Indicate?
There haven't been any insider transactions in the last three months -- that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. Insiders own shares in Australian Dairy Nutritionals and we see no evidence to suggest they are worried about the 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. Be aware that Australian Dairy Nutritionals is showing 4 warning signs in our investment analysis, and 3 of those are a bit concerning...