Openn Negotiation's AU$1.1m Market Cap Fall Books Insider Losses

The recent 14% drop in Openn Negotiation Limited's (ASX:OPN) stock could come as a blow to insiders who purchased AU$622.1k worth of stock at an average buy price of AU$0.015 over the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth AU$241.3k, which is not what they expected.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Openn Negotiation

The Last 12 Months Of Insider Transactions At Openn Negotiation

The insider George Bass made the biggest insider purchase in the last 12 months. That single transaction was for AU$150k worth of shares at a price of AU$0.068 each. That means that even when the share price was higher than AU$0.006 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

Happily, we note that in the last year insiders paid AU$622k for 40.21m shares. On the other hand they divested 1.05m shares, for AU$9.4k. In total, Openn Negotiation insiders bought more than they sold over the last year. The average buy price was around AU$0.015. I'd consider this a positive as it suggests insiders see value at around the current price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Openn Negotiation 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 Openn Negotiation 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Openn Negotiation insiders own about AU$2.0m worth of shares. That equates to 29% of the company. 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 Do The Openn Negotiation Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. Overall we don't see anything to make us think Openn Negotiation insiders are doubting the company, and they do own shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Openn Negotiation. Every company has risks, and we've spotted 7 warning signs for Openn Negotiation (of which 6 make us uncomfortable!) you should know about.

But note: Openn Negotiation 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.