Alpha HPA Limited's (ASX:A4N) stock dropped 14% this week, offering solace to those who sold earlier in the year

By
Simply Wall St
Published
February 15, 2022
ASX:A4N
Source: Shutterstock

Alpha HPA Limited's (ASX:A4N) value has fallen 14% in the last week, but insiders who sold AU$2.5m worth of stock over the last year have had less success. The average selling price of AU$0.37 is still lower than the current share price, or in other words, insiders would have been better off holding on to their shares.

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.

View our latest analysis for Alpha HPA

Alpha HPA Insider Transactions Over The Last Year

The insider, Grey Egerton-Warburton, made the biggest insider sale in the last 12 months. That single transaction was for AU$2.5m worth of shares at a price of AU$0.54 each. That means that even when the share price was below the current price of AU$0.57, an insider wanted to cash in some shares. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 17% of Grey Egerton-Warburton's holding. Grey Egerton-Warburton was the only individual insider to sell shares in the last twelve months.

In the last twelve months insiders purchased 560.00k shares for AU$316k. But insiders sold 6.85m shares worth AU$2.5m. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
ASX:A4N Insider Trading Volume February 15th 2022

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 20% of Alpha HPA shares, worth about AU$91m. 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 Alpha HPA Tell Us?

The fact that there have been no Alpha HPA insider transactions recently certainly doesn't bother us. We don't take much encouragement from the transactions by Alpha HPA insiders. But we do like the fact that insiders own a fair chunk of the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. At Simply Wall St, we've found that Alpha HPA has 3 warning signs (2 don't sit too well with us!) that deserve your attention before going any further with your analysis.

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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