Insiders who bought stock earlier this year lose -AU$78k as AMA Group Limited (ASX:AMA) drops to AU$405m

By
Simply Wall St
Published
November 29, 2021
ASX:AMA
Source: Shutterstock

The recent price decline of 11% in AMA Group Limited's (ASX:AMA) stock may have disappointed insiders who bought AU$476k worth of shares at an average price of AU$0.48 in the past 12 months. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only AU$399k.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for AMA Group

The Last 12 Months Of Insider Transactions At AMA Group

The insider, Andrew Hopkins, made the biggest insider sale in the last 12 months. That single transaction was for AU$246k worth of shares at a price of AU$0.75 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of AU$0.40. So it is hard to draw any strong conclusion from it. Andrew Hopkins was the only individual insider to sell over the last year.

Over the last year, we can see that insiders have bought 996.52k shares worth AU$476k. But insiders sold 347.06k shares worth AU$246k. In the last twelve months there was more buying than selling by AMA Group insiders. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
ASX:AMA Insider Trading Volume November 29th 2021

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

AMA Group Insiders Bought Stock Recently

There was some insider buying at AMA Group over the last quarter. Insiders purchased AU$35k worth of shares in that period. It's great to see that insiders are only buying, not selling. However, in this case the amount invested recently is quite small.

Does AMA Group Boast High 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 5.1% of AMA Group shares, worth about AU$21m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The AMA Group Insider Transactions Indicate?

Our data shows a little insider buying, but no selling, in the last three months. Overall the buying isn't worth writing home about. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in AMA Group and their transactions don't cause us concern. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. You'd be interested to know, that we found 2 warning signs for AMA Group and we suggest you have a look.

Of course AMA Group may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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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