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Insiders who bought AU$80.3k worth of Genetic Technologies Limited (ASX:GTG) stock in the last year have seen some of their losses recouped as the stock gained 19% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled AU$54k since the time of purchase.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for Genetic Technologies
Genetic Technologies Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Independent Non-Executive Chairman Peter Rubinstein for AU$80k worth of shares, at about AU$0.13 per share. That means that even when the share price was higher than AU$0.043 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. The only individual insider to buy over the last year was Peter Rubinstein.
You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
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. 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 Genetic Technologies insiders own about AU$456k worth of shares (which is 7.3% of the company). Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
So What Do The Genetic Technologies Insider Transactions Indicate?
The fact that there have been no Genetic Technologies insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Genetic Technologies stock. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 4 warning signs for Genetic Technologies (3 don't sit too well with us!) that we believe deserve your full attention.