Have Insiders Sold Alfabs Australia Shares Recently?

We'd be surprised if Alfabs Australia Limited (ASX:AAL) shareholders haven't noticed that the Non-Executive Chairman, William Paul Wavish, recently sold AU$400k worth of stock at AU$0.40 per share. That sale was 15% of their holding, so it does make us raise an eyebrow.

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The Last 12 Months Of Insider Transactions At Alfabs Australia

In fact, the recent sale by Non-Executive Chairman William Paul Wavish was not their only trade of Alfabs Australia shares this year. Earlier in the year, they spent AU$472k to buy shares at AU$0.47 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.42). 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 always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. William Paul Wavish was the only individual insider to buy shares in the last twelve months. Notably William Paul Wavish was also the biggest seller.

William Paul Wavish bought a total of 1.62m shares over the year at an average price of AU$0.44. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

View our latest analysis for Alfabs Australia

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

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. We usually like to see fairly high levels of insider ownership. From our data, it seems that Alfabs Australia insiders own 12% of the company, worth about AU$15m. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Whilst better than nothing, we're not overly impressed by these holdings.

What Might The Insider Transactions At Alfabs Australia Tell Us?

It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. Given that insiders also own a fair bit of Alfabs Australia we think they are probably pretty confident of a bright 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. To that end, you should learn about the 4 warning signs we've spotted with Alfabs Australia (including 1 which shouldn't be ignored).

But note: Alfabs Australia may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.