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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 Atlas Pearls Limited (ASX:ATP), it sends a favourable 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.
View our latest analysis for Atlas Pearls
The Last 12 Months Of Insider Transactions At Atlas Pearls
In the last twelve months, the biggest single sale by an insider was when the insider, William Martin, sold AU$104k worth of shares at a price of AU$0.21 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (AU$0.12). So it may not shed much light on insider confidence at current levels. William Martin was the only individual insider to sell over the last year.
Happily, we note that in the last year insiders paid AU$117k for 1.62m shares. But they sold 485.74k shares for AU$104k. In total, Atlas Pearls insiders bought more than they sold over the last year. They paid about AU$0.072 on average. To my mind it is good that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Atlas Pearls 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.
Insiders At Atlas Pearls Have Bought Stock Recently
We saw some Atlas Pearls insider buying shares in the last three months. Independent Non-Executive Director Jose Martins shelled out AU$50k for shares in that time. It's great to see that insiders are only buying, not selling. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Atlas Pearls insiders own about AU$10m worth of shares. That equates to 21% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.