Hopeful Week For Insiders Who Bought AU$1.96m Of Terragen Holdings Stock

Some of the losses seen by insiders who purchased AU$1.96m worth of Terragen Holdings Limited (ASX:TGH) shares over the past year were recovered after the stock increased by 11% over the past week. However, the purchase is proving to be an expensive wager as insiders are yet to get ahead of their losses which currently stand at AU$782k since the time of purchase.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At Terragen Holdings

Over the last year, we can see that the biggest insider purchase was by Non-Executive Director Scobie Dickinson Ward for AU$1.3m worth of shares, at about AU$0.035 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.021). 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 always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

In the last twelve months Terragen Holdings 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!

See our latest analysis for Terragen Holdings

Terragen Holdings is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership Of Terragen Holdings

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Terragen Holdings insiders own 42% of the company, currently worth about AU$4.5m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Terragen Holdings Tell Us?

The fact that there have been no Terragen Holdings insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. With high insider ownership and encouraging transactions, it seems like Terragen Holdings insiders think the business has merit. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Terragen Holdings. For example, Terragen Holdings has 4 warning signs (and 3 which are a bit unpleasant) we think you should know about.

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 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.