Sprintex Insiders May Regret Not Buying More, Market Cap Hits AU$34m

Insiders who bought Sprintex Limited (ASX:SIX) stock in the last 12 months were richly rewarded last week. The company's market value increased by AU$4.4m as a result of the stock's 15% gain over the same period. As a result, their original purchase of AU$632.1k worth of stock is now worth AU$2.75m.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Sprintex

Sprintex Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider David Steicke for AU$244k worth of shares, at about AU$0.013 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.062. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

While Sprintex insiders bought shares during the last year, they didn't sell. Their average price was about AU$0.014. We don't deny that it is nice to see insiders buying stock in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. 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!

Sprintex is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insider Ownership Of Sprintex

Many investors like to check how much of a company is owned by 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. Sprintex insiders own about AU$16m worth of shares (which is 47% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Sprintex Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. Judging from their transactions, and high insider ownership, Sprintex insiders feel good about the company's future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 6 warning signs for Sprintex (4 are a bit concerning!) and we strongly recommend you look at them before investing.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

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.