Don't Ignore The Insider Selling In Australian Bond Exchange Holdings

We note that a Australian Bond Exchange Holdings Limited (ASX:ABE) insider, Allan Farrar, recently sold AU$101k worth of stock for AU$0.013 per share. While that isn't a lot of money, it was a substantial 98% of their holding, so certainly isn't a good sign.

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Australian Bond Exchange Holdings Insider Transactions Over The Last Year

In fact, the recent sale by Allan Farrar was the biggest sale of Australian Bond Exchange Holdings shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to take some cash off the table, even below the current price of AU$0.04. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was 98% of Allan Farrar's holding.

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!

Check out our latest analysis for Australian Bond Exchange Holdings

I will like Australian Bond Exchange Holdings 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.

Does Australian Bond Exchange Holdings Boast High Insider Ownership?

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. Australian Bond Exchange Holdings insiders own about AU$2.7m worth of shares (which is 59% 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.

What Might The Insider Transactions At Australian Bond Exchange Holdings Tell Us?

An insider sold Australian Bond Exchange Holdings shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To that end, you should learn about the 6 warning signs we've spotted with Australian Bond Exchange Holdings (including 4 which make us uncomfortable).

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 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.