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Have Insiders Been Selling Integral Diagnostics Limited (ASX:IDX) Shares?
We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Integral Diagnostics Limited (ASX:IDX).
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, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. 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 Integral Diagnostics
The Last 12 Months Of Insider Transactions At Integral Diagnostics
The Executive Director, Chien Ho, made the biggest insider sale in the last 12 months. That single transaction was for AU$266k worth of shares at a price of AU$4.43 each. That means that even when the share price was below the current price of AU$4.68, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 2.8% of Chien Ho's holding. Chien Ho was the only individual insider to sell over the last year.
Chien Ho ditched 90.00k shares over the year. The average price per share was AU$4.32. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Does Integral Diagnostics Boast High Insider Ownership?
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 4.6% of Integral Diagnostics shares, worth about AU$42m. 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 Integral Diagnostics Insider Transactions Indicate?
The fact that there have been no Integral Diagnostics insider transactions recently certainly doesn't bother us. We don't take much encouragement from the transactions by Integral Diagnostics insiders. But it's good to see that insiders own shares in the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 2 warning signs for Integral Diagnostics you should know about.
Of course Integral Diagnostics 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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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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About ASX:IDX
Integral Diagnostics
A healthcare services company, engages in the provision of diagnostic imaging services to general practitioners, medical specialists, and allied health professionals and their patients in Australia and New Zealand.
Reasonable growth potential and fair value.
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