Stock Analysis

Chairman & MD Mark Gray Just Bought 6.4% More Shares In Allegiance Coal Limited (ASX:AHQ)

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ASX:AHQ
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Whilst it may not be a huge deal, we thought it was good to see that the Allegiance Coal Limited (ASX:AHQ) Chairman & MD, Mark Gray, recently bought AU$83k worth of stock, for AU$0.05 per share. Although the purchase is not a big one, increasing their shareholding by only 6.4%, it can be interpreted as a good sign.

View our latest analysis for Allegiance Coal

The Last 12 Months Of Insider Transactions At Allegiance Coal

In fact, the recent purchase by Mark Gray was the biggest purchase of Allegiance Coal shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to buy, at around the current price, which is AU$0.051. 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. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. The good news for Allegiance Coal share holders is that insiders were buying at near the current price.

While Allegiance Coal insiders bought shares during the last year, they didn't sell. 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!

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ASX:AHQ Insider Trading Volume December 27th 2020

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data indicates that Allegiance Coal insiders own about AU$3.7m worth of shares (which is 8.5% of the company). We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We do generally prefer see higher levels of insider ownership.

So What Does This Data Suggest About Allegiance Coal Insiders?

It is good to see recent purchasing. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Allegiance Coal insiders are expecting a bright future. 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. Our analysis shows 5 warning signs for Allegiance Coal (2 are a bit unpleasant!) and we strongly recommend you look at them before investing.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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, but not derivative transactions.

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