Sprintex Stock Down 11% But Insiders Still In AU$399k Profit

Insiders who purchased Sprintex Limited (ASX:SIX) shares in the past 12 months are unlikely to be deeply impacted by the stock's 11% decline over the past week. Even after accounting for the recent loss, the AU$204.6k worth of stock purchased by them is now worth AU$603.9k or in other words, their investment continues to give good returns.

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 Sprintex

Sprintex Insider Transactions Over The Last Year

The insider David Steicke made the biggest insider purchase in the last 12 months. That single transaction was for AU$193k worth of shares at a price of AU$0.024 each. Even though the purchase was made at a significantly lower price than the recent price (AU$0.058), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Sprintex insiders may have bought shares in the last year, but they didn't sell any. Their average price was about AU$0.02. 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. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Sprintex 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.

Are Sprintex Insiders Buying Or Selling?

insider Richard Siemens bought just AU$6.6k worth of shares in that time. That's not much at all. So it is hard to draw any conclusion about how insiders are feeling about the stock, from these recent trades.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Sprintex insiders own 42% of the company, worth about AU$15m. 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?

Our data shows a little insider buying, but no selling, in the last three months. The net investment is not enough to encourage us much. However, our analysis of transactions over the last year is heartening. It would be great to see more insider buying, but overall it seems like Sprintex insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the 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. When we did our research, we found 6 warning signs for Sprintex (4 make us uncomfortable!) that we believe deserve your full attention.

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.