Bullish Ai-Media Technologies Insiders Rewarded As Their Investment Rises To AU$4.58m

Insiders who bought Ai-Media Technologies Limited (ASX:AIM) stock in the last 12 months were richly rewarded last week. The company's market value increased by AU$10m as a result of the stock's 13% gain over the same period. As a result, the stock they originally bought for AU$3.17m is now worth AU$4.58m.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Ai-Media Technologies

Ai-Media Technologies Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Co-Founder Anthony Abrahams for AU$1.6m worth of shares, at about AU$0.31 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.45. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

While Ai-Media Technologies insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Ai-Media Technologies 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.

Ai-Media Technologies Insiders Bought Stock Recently

Over the last quarter, Ai-Media Technologies insiders have spent a meaningful amount on shares. Specifically, Co-Founder Anthony Abrahams bought AU$3.1m worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.

Insider Ownership Of Ai-Media Technologies

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. It appears that Ai-Media Technologies insiders own 31% of the company, worth about AU$29m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Ai-Media Technologies Tell Us?

It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Ai-Media Technologies insiders are well aligned, and that they may think the share price is too low. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 1 warning sign with Ai-Media Technologies and understanding it should be part of your investment process.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com