Alfabs Australia Insider Buyers See Boost After Market Cap Rose AU$13m

Last week, Alfabs Australia Limited (ASX:AAL) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 12% last week, resulting in a AU$13m increase in the company's market worth, implying a 20% gain on their initial purchase. As a result, the stock they originally bought for AU$781.6k is now worth AU$937.4k.

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.

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Alfabs Australia Insider Transactions Over The Last Year

The Non-Executive Chairman William Paul Wavish made the biggest insider purchase in the last 12 months. That single transaction was for AU$397k worth of shares at a price of AU$0.36 each. Even though the purchase was made at a significantly lower price than the recent price (AU$0.43), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

Alfabs Australia insiders may have bought shares in the last year, but they didn't sell any. 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!

Check out our latest analysis for Alfabs Australia

Alfabs Australia 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.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Our data indicates that Alfabs Australia insiders own about AU$13m worth of shares (which is 11% of the company). But they may have an indirect interest through a corporate structure that we haven't picked up on. Whilst better than nothing, we're not overly impressed by these holdings.

So What Do The Alfabs Australia 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. Insiders own shares in Alfabs Australia and we see no evidence to suggest they are worried about the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Alfabs Australia. Our analysis shows 3 warning signs for Alfabs Australia (1 is 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.