Possible Turnaround For Terragen Holdings Insiders, Still Down AU$303k

Insiders who bought AU$2.42m worth of Terragen Holdings Limited (ASX:TGH) stock in the last year recovered part of their losses as the stock rose by 11% last 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$303k since the time of purchase.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Terragen Holdings

Terragen Holdings Insider Transactions Over The Last Year

The Director Scobie Dickinson Ward made the biggest insider purchase in the last 12 months. That single transaction was for AU$2.0m worth of shares at a price of AU$0.024 each. That means that even when the share price was higher than AU$0.021 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Terragen Holdings insiders may have bought shares in the last year, but they didn't sell any. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Are Terragen Holdings Insiders Buying Or Selling?

There was only a small bit of insider buying, worth AU$720, in the last three months. So it is hard to draw any conclusion about how insiders are feeling about the stock, from these recent trades.

Insider Ownership Of Terragen Holdings

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Terragen Holdings insiders own 43% of the company, worth about AU$3.3m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Terragen Holdings Tell Us?

Our data shows a little insider buying, but no selling, in the last three months. Overall the buying isn't worth writing home about. However, our analysis of transactions over the last year is heartening. It would be great to see more insider buying, but overall it seems like Terragen Holdings insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Terragen Holdings. To that end, you should learn about the 5 warning signs we've spotted with Terragen Holdings (including 4 which don't sit too well with us).

Of course Terragen Holdings may not be the best stock to buy. So you may wish to see this free collection of high quality 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.