With stock up 12%, Insiders of Hexima Limited (ASX:HXL) must be wishing they had bought more last year

By
Simply Wall St
Published
May 13, 2022
ASX:HXL
Source: Shutterstock

Hexima Limited (ASX:HXL) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 12% resulting in a AU$5.8m addition to the company’s market value. In other words, the original AU$161k purchase is now worth AU$203k.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Hexima

Hexima Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider Steven Skala for AU$100k worth of shares, at about AU$0.32 per share. That means that an insider was happy to buy shares at around the current price of AU$0.34. 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. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for Hexima share holders is that insiders were buying at near the current price.

Hexima insiders may have bought shares in the last year, but they didn't sell any. They paid about AU$0.27 on average. To my mind it is good that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. 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:HXL Insider Trading Volume May 13th 2022

Hexima is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership of Hexima

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Hexima insiders own about AU$18m worth of shares. That equates to 32% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Hexima Insider Transactions Indicate?

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. Insiders do have a stake in Hexima and their transactions don't cause us concern. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To assist with this, we've discovered 4 warning signs that you should run your eye over to get a better picture of Hexima.

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, but not derivative transactions.

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