Hexima Decline Means Insider Profits Down To AU$90k

Hexima Limited (ASX:HXL) insiders who acquired shares over the previous 12 months, can probably afford to ignore the recent 22% decline in the stock price. After taking the recent loss into consideration, the AU$402.2k worth of stock they bought is now worth AU$492.4k, indicating that their investment yielded a positive return.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Hexima

Hexima Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider John Tarrant bought AU$155k worth of shares at a price of AU$0.012 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.018. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

John Tarrant bought 27.36m shares over the last 12 months at an average price of AU$0.015. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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

Does Hexima Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Hexima insiders own about AU$1.4m worth of shares (which is 45% of the company). 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 Hexima Insiders?

The fact that there have been no Hexima insider transactions recently certainly doesn't bother us. 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 Hexima insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 5 warning signs for Hexima you should be aware of.

But note: Hexima 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.