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It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in ImExHS Limited's (ASX:IME) case, it's fantastic news for shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for ImExHS
ImExHS Insider Transactions Over The Last Year
Notably, that recent sale by Carlos Palacio is the biggest insider sale of ImExHS shares that we've seen in the last year. That means that an insider was selling shares at below the current price (AU$0.47). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 5.5% of Carlos Palacio's stake.
Happily, we note that in the last year insiders paid AU$250k for 454.55k shares. But insiders sold 166.13k shares worth AU$78k. In total, ImExHS insiders bought more than they sold over the last year. 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!
There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
ImExHS Insiders Are Selling The Stock
The last three months saw significant insider selling at ImExHS. Specifically, Non-Executive Director Carlos Palacio ditched AU$78k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
Does ImExHS Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It appears that ImExHS insiders own 29% of the company, worth about AU$6.3m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The ImExHS Insider Transactions Indicate?
An insider hasn't bought ImExHS stock in the last three months, but there was some selling. But we take heart from prior transactions. We like that insiders own a fair amount of the company. So we're happy enough to look past some selling. 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, ImExHS has 4 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.