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Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Micro-X Limited (ASX:MX1), that sends out a positive message to the company's 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.
Check out our latest analysis for Micro-X
The Last 12 Months Of Insider Transactions At Micro-X
Over the last year, we can see that the biggest insider purchase was by Independent Non-Executive Director Patrick O'Brien for AU$100k worth of shares, at about AU$0.095 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.087). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
In the last twelve months Micro-X insiders were buying shares, but not selling. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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.
Micro-X Insiders Bought Stock Recently
It's good to see that Micro-X insiders have made notable investments in the company's shares. Specifically, Independent Non-Executive Director Patrick O'Brien bought AU$100k worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.
Does Micro-X 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 6.1% of Micro-X shares, worth about AU$3.1m, according to our data. We do generally prefer see higher levels of insider ownership.
So What Do The Micro-X Insider Transactions Indicate?
The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Micro-X stock. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Micro-X. To assist with this, we've discovered 3 warning signs that you should run your eye over to get a better picture of Micro-X.