Insider Buyers Lose AU$55k As Helloworld Travel Sheds AU$62m

The recent 19% drop in Helloworld Travel Limited's (ASX:HLO) stock could come as a blow to insiders who purchased AU$392.0k worth of stock at an average buy price of AU$1.93 over 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$337.0k which is not ideal.

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 Helloworld Travel

The Last 12 Months Of Insider Transactions At Helloworld Travel

The CEO, MD & Director Andrew Burnes made the biggest insider purchase in the last 12 months. That single transaction was for AU$186k worth of shares at a price of AU$1.86 each. That means that even when the share price was higher than AU$1.66 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

While Helloworld Travel insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Have Helloworld Travel Insiders Traded Recently?

Independent Non-Executive Director Martin Pakula bought just AU$6.1k worth of shares in that time. That's not much at all. Overall, we don't think these recent trades are particularly informative, one way or the other.

Insider Ownership

Many investors like to check how much of a company is owned by 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. Helloworld Travel insiders own about AU$40m worth of shares. That equates to 15% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Helloworld Travel Insiders?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. Overall the buying isn't worth writing home about. However, our analysis of transactions over the last year is heartening. Overall we don't see anything to make us think Helloworld Travel 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. Every company has risks, and we've spotted 1 warning sign for Helloworld Travel you should know about.

But note: Helloworld Travel 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.