Insider Stock Buyers At Micro-X Recouped Some Losses This Week

Insiders who bought AU$100.0k worth of Micro-X Limited (ASX:MX1) stock in the last year recovered part of their losses as the stock rose by 10.0% last week. The purchase, however, has proven to be a pricey bet, with losses currently totalling AU$31k.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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Micro-X Insider Transactions Over The Last Year

The Independent Non Executive Chairman Patrick O'Brien made the biggest insider purchase in the last 12 months. That single transaction was for AU$100k worth of shares at a price of AU$0.095 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.066). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Patrick O'Brien was the only individual insider to buy shares in the last twelve months.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Check out our latest analysis for Micro-X

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insider Ownership Of Micro-X

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. Our data indicates that Micro-X insiders own about AU$2.4m worth of shares (which is 5.5% of the company). We do generally prefer see higher levels of insider ownership.

So What Do The Micro-X Insider Transactions Indicate?

The fact that there have been no Micro-X insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. The transactions are fine but it'd be more encouraging if Micro-X insiders bought more shares in 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. In terms of investment risks, we've identified 3 warning signs with Micro-X and understanding them should be part of your investment process.

Of course Micro-X 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 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.