Oventus Medical Limited (ASX:OVN) drops to AU$12m and insiders who purchased earlier this year lose another AU$199k

By
Simply Wall St
Published
February 25, 2022
ASX:OVN
Source: Shutterstock

The recent price decline of 19% in Oventus Medical Limited's (ASX:OVN) stock may have disappointed insiders who bought AU$355k worth of shares at an average price of AU$0.12 in the past 12 months. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth AU$156k which is not ideal.

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.

See our latest analysis for Oventus Medical

The Last 12 Months Of Insider Transactions At Oventus Medical

Over the last year, we can see that the biggest insider purchase was by insider Melvyn Bridges for AU$145k worth of shares, at about AU$0.11 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.051). 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. 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.

In the last twelve months Oventus Medical insiders were buying shares, but not selling. 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!

insider-trading-volume
ASX:OVN Insider Trading Volume February 25th 2022

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

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Oventus Medical insiders own about AU$2.6m worth of shares. That equates to 21% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Oventus Medical Insider Transactions Indicate?

The fact that there have been no Oventus Medical insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. Insiders own shares in Oventus Medical and we see no evidence to suggest they are worried about the 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. Case in point: We've spotted 5 warning signs for Oventus Medical you should be aware of, and 4 of them are a bit concerning.

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.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.