Stock Analysis

Insiders who purchased this year lose AU$143k as SelfWealth Limited (ASX:SWF) stock drops to AU$0.22

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Insiders who acquired AU$286k worth of SelfWealth Limited's (ASX:SWF) stock at an average price of AU$0.44 in the past 12 months may be dismayed by the recent 12% price decline. 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$143k which is not ideal.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for SelfWealth

SelfWealth Insider Transactions Over The Last Year

The insider Nicholas Kephala made the biggest insider purchase in the last 12 months. That single transaction was for AU$286k worth of shares at a price of AU$0.44 each. That means that even when the share price was higher than AU$0.22 (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. 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 Nicholas Kephala.

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!

ASX:SWF Insider Trading Volume May 14th 2022

SelfWealth is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Insiders own 14% of SelfWealth shares, worth about AU$7.2m, according to our data. But they may have an indirect interest through a corporate structure that we haven't picked up on. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

What Might The Insider Transactions At SelfWealth Tell Us?

The fact that there have been no SelfWealth insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. The transactions are fine but it'd be more encouraging if SelfWealth insiders bought more shares in the company. 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. In terms of investment risks, we've identified 2 warning signs with SelfWealth and understanding them should be part of your investment process.

Of course SelfWealth 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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Find out whether SelfWealth is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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