Stock Analysis

Insider Buying: The Healthia Limited (ASX:HLA) Independent Non-Executive Director Just Bought 4.7% More Shares

ASX:HLA
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Whilst it may not be a huge deal, we thought it was good to see that the Healthia Limited (ASX:HLA) Independent Non-Executive Director, Paul Wilson, recently bought AU$96k worth of stock, for AU$1.60 per share. However, it only increased their shares held by 4.7%, and it wasn't a huge purchase by absolute value, either.

See our latest analysis for Healthia

The Last 12 Months Of Insider Transactions At Healthia

In the last twelve months, the biggest single sale by an insider was when the Group COO & Executive Director, Anthony Ganter, sold AU$197k worth of shares at a price of AU$0.99 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of AU$1.70. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 18% of Anthony Ganter's holding.

In the last twelve months insiders purchased 285.27k shares for AU$337k. On the other hand they divested 270.00k shares, for AU$281k. In the last twelve months there was more buying than selling by Healthia insiders. Their average price was about AU$1.18. We don't deny that it is nice to see insiders buying stock in the company. However, we do note that they were buying at significantly lower prices than today's share price. 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!

insider-trading-volume
ASX:HLA Insider Trading Volume March 6th 2021

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Does Healthia 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Healthia insiders own 34% of the company, worth about AU$52m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Healthia Tell Us?

It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. Given that insiders also own a fair bit of Healthia we think they are probably pretty confident of a bright future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To that end, you should learn about the 4 warning signs we've spotted with Healthia (including 1 which shouldn't be ignored).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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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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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