Auctus Investment Group's AU$4.8m Market Cap Fall Books Insider Losses

The recent 10.0% drop in Auctus Investment Group Limited's (ASX:AVC) stock could come as a blow to insiders who purchased AU$225.3k worth of stock at an average buy price of AU$0.70 over the past 12 months. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only AU$175.0k.

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.

Check out our latest analysis for Auctus Investment Group

Auctus Investment Group Insider Transactions Over The Last Year

The MD & Director Campbell McComb made the biggest insider purchase in the last 12 months. That single transaction was for AU$136k worth of shares at a price of AU$0.70 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.54). 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. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. The only individual insider to buy over the last year was Campbell McComb.

Campbell McComb bought a total of 324.00k shares over the year at an average price of AU$0.70. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. 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).

Insider Ownership

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data indicates that Auctus Investment Group insiders own about AU$4.7m worth of shares (which is 11% of the company). But they may have an indirect interest through a corporate structure that we haven't picked up on. We do generally prefer see higher levels of insider ownership.

So What Do The Auctus Investment Group Insider Transactions Indicate?

It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Auctus Investment Group insiders are expecting a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Auctus Investment Group. For example, Auctus Investment Group has 4 warning signs (and 1 which is a bit concerning) we think you should know about.

Of course Auctus Investment Group 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 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