Australian Dairy Nutritionals Decline Means Insider Profits Down To AU$107k

Insiders who bought Australian Dairy Nutritionals Limited (ASX:AHF) stock lover the last 12 months are probably not as affected by last week’s 11% loss. Even after accounting for the recent loss, the AU$305.4k worth of stock purchased by them is now worth AU$412.4k or in other words, their investment continues to give good returns.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

We've discovered 4 warning signs about Australian Dairy Nutritionals. View them for free.

The Last 12 Months Of Insider Transactions At Australian Dairy Nutritionals

The Executive Chairman Peter Nathan made the biggest insider purchase in the last 12 months. That single transaction was for AU$81k worth of shares at a price of AU$0.019 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.042. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

While Australian Dairy Nutritionals insiders bought shares during the last year, they didn't sell. Their average price was about AU$0.031. It is certainly positive to see that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

View our latest analysis for Australian Dairy Nutritionals

Australian Dairy Nutritionals is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insiders At Australian Dairy Nutritionals Have Bought Stock Recently

Over the last quarter, Australian Dairy Nutritionals insiders have spent a meaningful amount on shares. Executive Chairman Peter Nathan spent AU$85k on stock, and there wasn't any selling. This could be interpreted as suggesting a positive outlook.

Does Australian Dairy Nutritionals Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Insiders own 32% of Australian Dairy Nutritionals shares, worth about AU$10m. 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 Australian Dairy Nutritionals Tell Us?

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Insiders likely see value in Australian Dairy Nutritionals shares, given these transactions (along with notable insider ownership of the company). While it's good to be aware of 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. Every company has risks, and we've spotted 4 warning signs for Australian Dairy Nutritionals (of which 2 are significant!) you should know about.

But note: Australian Dairy Nutritionals 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 of direct interests only, but not derivative transactions or indirect interests.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.