Stock Analysis

Independent Non-Executive Chairman Timothy Antonie Just Bought A Handful Of Shares In Netwealth Group Limited (ASX:NWL)

  •  Updated
ASX:NWL
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Whilst it may not be a huge deal, we thought it was good to see that the Netwealth Group Limited (ASX:NWL) Independent Non-Executive Chairman, Timothy Antonie, recently bought AU$82k worth of stock, for AU$0.47 per share. Nevertheless, it only increased their shareholding by a minuscule percentage, and it wasn't a massive purchase by absolute value, either.

See our latest analysis for Netwealth Group

The Last 12 Months Of Insider Transactions At Netwealth Group

The Joint MD & Director, Michael Heine, made the biggest insider sale in the last 12 months. That single transaction was for AU$76m worth of shares at a price of AU$13.90 each. So it's clear an insider wanted to take some cash off the table, even below the current price of AU$15.25. 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 3.9% of Michael Heine's holding.

Over the last year, we can see that insiders have bought 350.00k shares worth AU$165k. On the other hand they divested 6.02m shares, for AU$84m. All up, insiders sold more shares in Netwealth Group than they bought, over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
ASX:NWL Insider Trading Volume February 22nd 2021

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

Does Netwealth Group Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Netwealth Group insiders own about AU$2.2b worth of shares (which is 58% 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 Netwealth Group Tell Us?

It's certainly positive to see the recent insider purchases. But we can't say the same for the transactions over the last 12 months. The recent buying by some insiders , along with high insider ownership, suggest that Netwealth Group insiders are fairly aligned, and optimistic. While we like knowing 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. While conducting our analysis, we found that Netwealth Group has 1 warning sign and it would be unwise to ignore this.

But note: Netwealth Group 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, but not derivative transactions.

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