Insider Sales At Audeara Landed A Good Price

While it’s been a great week for Audeara Limited (ASX:AUA) shareholders after stock gained 39%, company insiders might have missed out on those gains after selling stock earlier this year. The value of their investment would have been higher had they waited to sell their stock.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Audeara

The Last 12 Months Of Insider Transactions At Audeara

Notably, that recent sale by Chris Jeffery is the biggest insider sale of Audeara shares that we've seen in the last year. So it's clear an insider wanted to take some cash off the table, even below the current price of AU$0.039. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 41% of Chris Jeffery's stake.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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Insiders At Audeara Have Sold Stock Recently

Over the last three months, we've seen significant insider selling at Audeara. Specifically, insider Chris Jeffery ditched AU$136k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership Of Audeara

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Audeara insiders own 57% of the company, currently worth about AU$3.2m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Audeara Insiders?

An insider sold Audeara shares recently, but they didn't buy any. Zooming out, the longer term picture doesn't give us much comfort. It is good to see high insider ownership, but the insider selling leaves us cautious. 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. To help with this, we've discovered 5 warning signs (3 shouldn't be ignored!) that you ought to be aware of before buying any shares in Audeara.

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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.

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