Greenhy2 Insider Sellers Vindicated After 12% Drop

Insiders at Greenhy2 Limited (ASX:H2G) sold AU$168k worth of stock at an average price of AU$0.006 a share over the past year, making the most of their investment. The company's market valuation decreased by AU$1.4m after the stock price dropped 12% over the past week, but insiders were spared from painful losses.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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The Last 12 Months Of Insider Transactions At Greenhy2

The insider, Guido Belgiorno-Nettis, made the biggest insider sale in the last 12 months. That single transaction was for AU$168k worth of shares at a price of AU$0.006 each. So it's clear an insider wanted to take some cash off the table, even below the current price of AU$0.015. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 34% of Guido Belgiorno-Nettis's stake. Guido Belgiorno-Nettis was the only individual insider to sell over the last year.

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 Greenhy2

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insider Ownership

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Insiders own 37% of Greenhy2 shares, worth about AU$3.8m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Greenhy2 Insiders?

It doesn't really mean much that no insider has traded Greenhy2 shares in the last quarter. Still, the insider transactions at Greenhy2 in the last 12 months are not very heartening. The modest level of insider ownership is, at least, some comfort. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 3 warning signs for Greenhy2 (2 are a bit concerning!) and we strongly recommend you look at these 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.