Insiders who purchased Academies Australasia Group Limited (ASX:AKG) earlier this year lose an additional AU$73k as the stock sinks to AU$0.23

By
Simply Wall St
Published
December 21, 2021
ASX:AKG
Source: Shutterstock

The recent price decline of 12% in Academies Australasia Group Limited's (ASX:AKG) stock may have disappointed insiders who bought AU$406k worth of shares at an average price of AU$0.28 in the past 12 months. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth AU$333k which is not ideal.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Academies Australasia Group

The Last 12 Months Of Insider Transactions At Academies Australasia Group

The Non-Executive Chairman John Schlederer made the biggest insider purchase in the last 12 months. That single transaction was for AU$117k worth of shares at a price of AU$0.30 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.23). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing 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.

Academies Australasia Group insiders may have bought shares in the last year, but they didn't sell any. 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!

insider-trading-volume
ASX:AKG Insider Trading Volume December 21st 2021

Academies Australasia Group 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.

Academies Australasia Group Insiders Bought Stock Recently

It's good to see that Academies Australasia Group insiders have made notable investments in the company's shares. Not only was there no selling that we can see, but they collectively bought AU$122k worth of shares. That shows some optimism about the company's future.

Insider Ownership of Academies Australasia Group

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. Academies Australasia Group insiders own about AU$25m worth of shares (which is 84% of the company). 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 Academies Australasia Group Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Academies Australasia Group. One for the watchlist, at least! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 2 warning signs for Academies Australasia Group you should be aware of.

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, but not derivative transactions.

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