Stock Analysis

ASX Limited (ASX:ASX) Insiders Have Been Selling

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ASX:ASX
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It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in ASX Limited (ASX:ASX).

What Is Insider Buying?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

Check out our latest analysis for ASX

ASX Insider Transactions Over The Last Year

The MD, CEO & Executive Director, Dominic Stevens, made the biggest insider sale in the last 12 months. That single transaction was for AU$751k worth of shares at a price of AU$84.00 each. So what is clear is that an insider saw fit to sell at around the current price of AU$70.84. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive). Dominic Stevens was the only individual insider to sell shares in the last twelve months.

Over the last year, we can see that insiders have bought 5.00k shares worth AU$352k. But insiders sold 8.94k shares worth AU$751k. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
ASX:ASX Insider Trading Volume March 20th 2021

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

ASX Insiders Bought Stock Recently

Over the last quarter, ASX insiders have spent a meaningful amount on shares. Overall, two insiders shelled out AU$352k for shares in the company -- and none sold. This makes one think the business has some good points.

Does ASX Boast High 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. ASX insiders own about AU$67m worth of shares. That equates to 0.5% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At ASX Tell Us?

It is good to see recent purchasing. On the other hand the transaction history, over the last year, isn't so positive. We don't take much heart from transactions by ASX insiders over the last year. But they own a reasonable amount of the company, and there was some buying recently. In short they are likely aligned with shareholders. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing ASX. While conducting our analysis, we found that ASX has 1 warning sign and it would be unwise to ignore this.

Of course ASX may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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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