Selling AU$802k Of Stock Was Lucrative Decision For Advanced Braking Technology Insiders

Despite the fact that Advanced Braking Technology Limited (ASX:ABV) stock rose 12% last week, insiders who sold AU$802k worth of stock in the previous 12 months are likely to be better off. Selling at an average price of AU$0.035, which is higher than the current price, may have been the best move for these insiders because their investment would have been worth less now than when they sold.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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 sale by an insider was when the insider, Keith Knowles, sold AU$798k worth of shares at a price of AU$0.035 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of AU$0.047. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 31% of Keith Knowles's stake. Keith Knowles was the only individual insider to sell over the last year.

Over the last year, we can see that insiders have bought 6.90m shares worth AU$264k. But insiders sold 22.90m shares worth AU$802k. Keith Knowles divested 22.90m shares over the last 12 months at an average price of AU$0.035. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership Of Advanced Braking Technology

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Advanced Braking Technology insiders own about AU$9.0m worth of shares (which is 50% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Advanced Braking Technology Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Advanced Braking Technology insider transactions don't fill us with confidence. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To help with this, we've discovered 2 warning signs (1 is a bit unpleasant!) that you ought to be aware of before buying any shares in Advanced Braking Technology.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.