Have Insiders Been Buying Aurizon Holdings Limited (ASX:AZJ) Shares?

We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Aurizon Holdings Limited (ASX:AZJ).

What Is Insider Buying?

It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.

We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.

Check out our latest analysis for Aurizon Holdings

Aurizon Holdings Insider Transactions Over The Last Year

Independent Non-Executive Director Michael Fraser made the biggest insider purchase in the last 12 months. That single transaction was for AU$146k worth of shares at a price of AU$4.86 each. So it’s clear an insider wanted to buy, at around the current price, which is AU$5.77. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today’s share price, as the discount to value may have narrowed with the rising price. The good news for Aurizon Holdings share holders is that insiders were buying at near the current price.

While Aurizon Holdings insiders bought shares last year, they didn’t sell. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

Aurizon Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

ASX:AZJ Recent Insider Trading, November 11th 2019
ASX:AZJ Recent Insider Trading, November 11th 2019

Insiders at Aurizon Holdings Have Bought Stock Recently

Over the last three months, we’ve seen a bit of insider buying at Aurizon Holdings. Independent Non-Executive Director Marcelo De Almeida Bastos purchased AU$50k worth of shares in that period. It’s great to see that insiders are only buying, not selling. But the amount invested in the last three months isn’t enough for us too put much weight on it, as a single factor.

Does Aurizon Holdings Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Our data suggests Aurizon Holdings insiders own 0.04% of the company, worth about AU$4.9m. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. I generally like to see higher levels of ownership.

So What Does This Data Suggest About Aurizon Holdings Insiders?

Our data shows a little insider buying, but no selling, in the last three months. Overall the buying isn’t worth writing home about. However, our analysis of transactions over the last year is heartening. The transactions are fine but it’d be more encouraging if Aurizon Holdings insiders bought more shares in the company. Of course, the future is what matters most. So if you are interested in Aurizon Holdings, you should check out this free report on analyst forecasts for the company.

Of course Aurizon Holdings may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.