Possible turnaround for Amplia Therapeutics Limited (ASX:ATX) insiders, still down AU$219k after a AU$916k shopping spree

By
Simply Wall St
Published
March 17, 2022
ASX:ATX
Source: Shutterstock

Insiders who purchased AU$916k worth of Amplia Therapeutics Limited (ASX:ATX) shares over the past year recouped some of their losses after price gained 12% 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$219k 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.

See our latest analysis for Amplia Therapeutics

The Last 12 Months Of Insider Transactions At Amplia Therapeutics

In the last twelve months, the biggest single purchase by an insider was when insider Allan Moss bought AU$365k worth of shares at a price of AU$0.18 per share. That means that even when the share price was higher than AU$0.14 (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. 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.

While Amplia Therapeutics insiders bought shares during the last year, they didn't sell. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
ASX:ATX Insider Trading Volume March 17th 2022

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

Insiders at Amplia Therapeutics Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at Amplia Therapeutics. Non-Executive Director Jane Bell spent AU$141k on stock, and there wasn't any selling. This makes one think the business has some good points.

Insider Ownership of Amplia Therapeutics

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. From our data, it seems that Amplia Therapeutics insiders own 10% of the company, worth about AU$2.9m. But they may have an indirect interest through a corporate structure that we haven't picked up on. Whilst better than nothing, we're not overly impressed by these holdings.

What Might The Insider Transactions At Amplia Therapeutics Tell Us?

It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Amplia Therapeutics insiders are reasonably well aligned, and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Amplia Therapeutics. Every company has risks, and we've spotted 4 warning signs for Amplia Therapeutics (of which 2 are potentially serious!) you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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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