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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 Agrimin Limited (ASX:AMN), that sends out a positive 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.
See our latest analysis for Agrimin
Agrimin Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Independent Non-Executive Chairperson Richard Seville bought AU$292k worth of shares at a price of AU$0.15 per share. We do like to see buying, but this purchase was made at well below the current price of AU$0.26. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
In the last twelve months Agrimin insiders were buying shares, but not selling. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
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 Of Agrimin
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 14% of Agrimin shares, worth about AU$12m, according to our data. But they may have an indirect interest through a corporate structure that we haven't picked up on. We do generally prefer see higher levels of insider ownership.
What Might The Insider Transactions At Agrimin Tell Us?
It doesn't really mean much that no insider has traded Agrimin shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Agrimin and we see no evidence to suggest they are worried about the future. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example, Agrimin has 3 warning signs (and 1 which can't be ignored) we think you should know about.
But note: Agrimin may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.