Insider Traders Lose AU$29k As Genetic Technologies Drops

The recent 15% drop in Genetic Technologies Limited's (ASX:GTG) stock could come as a blow to insiders who purchased AU$80.3k worth of stock at an average buy price of AU$0.13 over the past 12 months. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth AU$51.2k which is not ideal.

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 Genetic Technologies

The Last 12 Months Of Insider Transactions At Genetic Technologies

Over the last year, we can see that the biggest insider purchase was by Independent Non-Executive Chairman Peter Rubinstein for AU$80k worth of shares, at about AU$0.13 per share. That means that even when the share price was higher than AU$0.083 (the recent price), an insider wanted to purchase shares. 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. 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. Peter Rubinstein was the only individual insider to buy shares in the last twelve months.

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 always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Does Genetic Technologies Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. From our data, it seems that Genetic Technologies insiders own 8.0% of the company, worth about AU$976k. Whilst better than nothing, we're not overly impressed by these holdings.

What Might The Insider Transactions At Genetic Technologies Tell Us?

It doesn't really mean much that no insider has traded Genetic Technologies shares in the last quarter. However, our analysis of transactions over the last year is heartening. We'd like to see bigger individual holdings. However, we don't see anything to make us think Genetic Technologies insiders are doubting the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Genetic Technologies. Be aware that Genetic Technologies is showing 4 warning signs in our investment analysis, and 3 of those are a bit concerning...

But note: Genetic Technologies 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 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.

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