Atlas Pearls Reaches AU$46m Market Cap Benefiting Insider Stock Buying

Last week, Atlas Pearls Limited (ASX:ATP) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 13% last week, resulting in a AU$5.2m increase in the company's market worth, implying a 46% gain on their initial purchase. As a result, their original purchase of AU$116.7k worth of stock is now worth AU$169.9k.

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.

Check out our latest analysis for Atlas Pearls

Atlas Pearls Insider Transactions Over The Last Year

The insider, William Martin, made the biggest insider sale in the last 12 months. That single transaction was for AU$104k worth of shares at a price of AU$0.21 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of AU$0.10. So it may not tell us anything about how insiders feel about the current share price. William Martin was the only individual insider to sell shares in the last twelve months.

In the last twelve months insiders purchased 1.62m shares for AU$117k. On the other hand they divested 485.74k shares, for AU$104k. In the last twelve months there was more buying than selling by Atlas Pearls insiders. The average buy price was around AU$0.072. We don't deny that it is nice to see insiders buying stock in the company. However, we do note that they were buying at significantly lower prices than today's share price. 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!

Atlas Pearls 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.

Insiders At Atlas Pearls Have Bought Stock Recently

We saw some Atlas Pearls insider buying shares in the last three months. Independent Non-Executive Director Jose Martins purchased AU$50k worth of shares in that period. It's good to see the insider buying, as well as the lack of recent sellers. However, in this case the amount invested recently is quite small.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 21% of Atlas Pearls shares, worth about AU$9.5m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Atlas Pearls Insider Transactions Indicate?

Our data shows a little insider buying, but no selling, in the last three months. The net investment is not enough to encourage us much. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think Atlas Pearls insiders are doubting the company, and they do own shares. While it's good to be aware of 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. Our analysis shows 4 warning signs for Atlas Pearls (1 is concerning!) and we strongly recommend you look at these before investing.

But note: Atlas Pearls 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.

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

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.