Insider Traders Lose AU$157k As Market Herald Drops \

The recent 21% drop in The Market Herald Limited's (ASX:TMH) stock could come as a blow to insiders who purchased AU$432k worth of stock at an average buy price of AU$0.42 over the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth AU$275k, which is not great.

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.

View our latest analysis for Market Herald

Market Herald Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Non-Executive Director Gavin Argyle bought AU$220k worth of shares at a price of AU$0.40 per share. That means that an insider was happy to buy shares at above the current price of AU$0.27. 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. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Gavin Argyle was the only individual insider to buy shares in the last twelve months.

Gavin Argyle bought a total of 1.02m shares over the year at an average price of AU$0.42. 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!

Market Herald is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Have Market Herald Insiders Traded Recently?

The last three months saw some Market Herald insider selling. Independent Non-Executive Chairman Alec Pismiris sold just AU$15k worth of shares in that time. It's not great to see insider selling, nor the lack of recent buyers. But the amount sold isn't enough for us to put any weight on it.

Insider Ownership Of Market Herald

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Market Herald insiders own about AU$32m worth of shares. That equates to 37% 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 Do The Market Herald Insider Transactions Indicate?

Our data shows a little more insider selling, but no insider buying, in the last three months. But the sales were small, so we're not concerned. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think Market Herald insiders are doubting the company, and they do own shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Market Herald. For instance, we've identified 4 warning signs for Market Herald (3 are a bit unpleasant) you should be aware of.

But note: Market Herald 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, but not derivative transactions.

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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.