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Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Advanced Braking Technology Limited (ASX:ABV), it sends a favourable message to the company's shareholders.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for Advanced Braking Technology
The Last 12 Months Of Insider Transactions At Advanced Braking Technology
In the last twelve months, the biggest single purchase by an insider was when insider Keith Knowles bought AU$320k worth of shares at a price of AU$0.044 per share. Even though the purchase was made at a significantly lower price than the recent price (AU$0.058), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
In the last twelve months insiders purchased 8.91m shares for AU$399k. On the other hand they divested 5.43m shares, for AU$238k. In the last twelve months there was more buying than selling by Advanced Braking Technology insiders. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Advanced Braking Technology is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
Advanced Braking Technology Insiders Bought Stock Recently
There was some insider buying at Advanced Braking Technology over the last quarter. insider Keith Knowles bought AU$62k worth in that time. On the other hand, insider Keith Knowles sold AU$9.1k worth of shares. While it's good to see the insider buying, the net amount bought isn't enough for us to gain much confidence from it.
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. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Advanced Braking Technology insiders own 51% of the company, worth about AU$11m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.