Read This Before Selling Australian Vintage Ltd (ASX:AVG) Shares

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 before you buy or sell Australian Vintage Ltd (ASX:AVG), you may well want to know whether insiders have been buying or selling.

What Is Insider Selling?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.

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'.

View our latest analysis for Australian Vintage

Australian Vintage Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Non-Independent Non-Executive Director Jiang Yuan for AU$307k worth of shares, at about AU$0.61 per share. That means that even when the share price was higher than AU$0.58 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels. Notably Jiang Yuan was also the biggest seller.

In the last twelve months insiders purchased 883.76k shares for AU$522k. But they sold 509.76k shares for AU$306k. Overall, Australian Vintage insiders were net buyers during the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

Australian Vintage is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Australian Vintage Insiders Bought Stock Recently

Over the last three months, we've seen significantly more insider buying, than insider selling, at Australian Vintage. In total, four insiders bought AU$475k worth of shares in that time. But we did see Non-Independent Non-Executive Director Jiang Yuan sell shares worth AU$306k. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.

Insider Ownership of Australian Vintage

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Australian Vintage insiders own about AU$28m worth of shares. That equates to 17% 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.

So What Do The Australian Vintage Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. Insiders likely see value in Australian Vintage shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Australian Vintage. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Australian Vintage.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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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This article by Simply Wall St is general in nature. 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.
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