Audeara Insider Stock Sellers Must Be Relieved As Market Cap Falls To AU$7.9m

Over the past year, insiders sold AU$136k worth of Audeara Limited (ASX:AUA) stock at an average price of AU$0.034 per share allowing them to get the most out of their money. The company's market valuation decreased by AU$1.1m after the stock price dropped 12% over the past week, but insiders were spared from painful losses.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Audeara

The Last 12 Months Of Insider Transactions At Audeara

The insider, Chris Jeffery, made the biggest insider sale in the last 12 months. That single transaction was for AU$136k worth of shares at a price of AU$0.034 each. That means that an insider was selling shares at slightly below the current price (AU$0.045). 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 41% of Chris Jeffery's stake. Chris Jeffery 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!

I will like Audeara better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. It's great to see that Audeara insiders own 48% of the company, worth about AU$3.7m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Audeara Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Audeara shares in the last quarter. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Audeara insider transactions don't fill us with confidence. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Audeara. Be aware that Audeara is showing 5 warning signs in our investment analysis, and 2 of those don't sit too well with us...

But note: Audeara 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.