Insiders Give Up AU$259k As Microba Life Sciences Stock Drops To AU$0.15

Insiders who bought AU$683.5k worth of Microba Life Sciences Limited's (ASX:MAP) stock at an average buy price of AU$0.24 over the last year may be disappointed by the recent 12% decrease in the stock. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth AU$424.3k, which is not what they expected.

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 Microba Life Sciences

The Last 12 Months Of Insider Transactions At Microba Life Sciences

The Non-Executive Director Richard Bund made the biggest insider purchase in the last 12 months. That single transaction was for AU$450k worth of shares at a price of AU$0.23 each. That means that an insider was happy to buy shares at above the current price of AU$0.15. 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. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

Microba Life Sciences insiders may have bought shares in the last year, but they didn't sell any. 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!

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

Does Microba Life Sciences 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. From our data, it seems that Microba Life Sciences insiders own 15% of the company, worth about AU$9.8m. But they may have an indirect interest through a corporate structure that we haven't picked up on. We do generally prefer see higher levels of insider ownership.

What Might The Insider Transactions At Microba Life Sciences Tell Us?

The fact that there have been no Microba Life Sciences insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Microba Life Sciences stock. 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 4 warning signs for Microba Life Sciences you should know about.

But note: Microba Life Sciences 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.

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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.