Terragen Holdings Up 20%, Insiders Still Down After AU$1.96m Purchase

Insiders who bought AU$1.96m worth of Terragen Holdings Limited (ASX:TGH) stock in the last year have seen some of their losses recouped as the stock gained 20% last week. However, total losses seen by insiders are still AU$279k 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 would consider it foolish to ignore insider transactions altogether.

The Last 12 Months Of Insider Transactions At Terragen Holdings

In the last twelve months, the biggest single purchase by an insider was when Non-Executive Director Scobie Dickinson Ward bought AU$1.3m worth of shares at a price of AU$0.035 per share. That means that an insider was happy to buy shares at above the current price of AU$0.03. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for 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 click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

See our latest analysis for Terragen Holdings

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

Insiders At Terragen Holdings Have Bought Stock Recently

Over the last quarter, Terragen Holdings insiders have spent a meaningful amount on shares. Overall, four insiders shelled out AU$559k for shares in the company -- and none sold. This is a positive in our book as it implies some confidence.

Insider Ownership Of Terragen Holdings

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. 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$6.4m 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.

So What Does This Data Suggest About Terragen Holdings Insiders?

It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Terragen Holdings. Looks promising! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Terragen Holdings. To help with this, we've discovered 3 warning signs (2 can't be ignored!) that you ought to be aware of before buying any shares in Terragen Holdings.

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.