Had insiders known XRF Scientific Limited (ASX:XRF) would hit AU$72m they might have invested more last year

By
Simply Wall St
Published
August 24, 2021
ASX:XRF
Source: Shutterstock

Last week, XRF Scientific Limited (ASX:XRF) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 10% last week, resulting in a AU$6.7m increase in the company's market worth. As a result, their original purchase of AU$226k worth of stock is now worth AU$367k.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for XRF Scientific

The Last 12 Months Of Insider Transactions At XRF Scientific

In the last twelve months, the biggest single purchase by an insider was when Non-Executive Director David Brown bought AU$90k worth of shares at a price of AU$0.30 per share. We do like to see buying, but this purchase was made at well below the current price of AU$0.54. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

XRF Scientific 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 click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
ASX:XRF Insider Trading Volume August 25th 2021

XRF Scientific is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does XRF Scientific Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 27% of XRF Scientific shares, worth about AU$20m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At XRF Scientific Tell Us?

The fact that there have been no XRF Scientific insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in XRF Scientific and their transactions don't cause us concern. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Every company has risks, and we've spotted 4 warning signs for XRF Scientific you should know about.

But note: XRF Scientific 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, but not derivative transactions.

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