AusQuest Gains 25%, Insider Trades Reap Benefit

AusQuest Limited (ASX:AQD) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 25% resulting in a AU$2.1m addition to the company’s market value. As a result, their original purchase of AU$600.8k worth of stock is now worth AU$750.9k.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for AusQuest

AusQuest Insider Transactions Over The Last Year

The Non-Executive Director Christopher Ellis made the biggest insider purchase in the last 12 months. That single transaction was for AU$539k worth of shares at a price of AU$0.008 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.01. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

AusQuest 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. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

AusQuest is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

AusQuest Insiders Bought Stock Recently

It's good to see that AusQuest insiders have made notable investments in the company's shares. Not only was there no selling that we can see, but they collectively bought AU$601k worth of shares. This is a positive in our book as it implies some confidence.

Does AusQuest 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. We usually like to see fairly high levels of insider ownership. AusQuest insiders own about AU$3.8m worth of shares. That equates to 36% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About AusQuest Insiders?

The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest AusQuest insiders are well aligned, and that they may think the share price is too low. 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. Every company has risks, and we've spotted 5 warning signs for AusQuest (of which 3 are significant!) you should know about.

But note: AusQuest 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.