Insiders who sold IDT Australia Limited (ASX:IDT) earlier this year probably made the right call as market cap dropped by AU$6.0m

By
Simply Wall St
Published
April 08, 2022
ASX:IDT
Source: Shutterstock

Insiders seem to have made the most of their holdings by selling AU$175k worth of IDT Australia Limited (ASX:IDT) stock at an average sell price of AU$0.64 during the past year. After the stock price dropped 13% last week, the company's market value declined by AU$6.0m, but insiders were able to mitigate their losses.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for IDT Australia

IDT Australia Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Mary Sontrop, sold AU$175k worth of shares at a price of AU$0.64 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is AU$0.17. So it may not tell us anything about how insiders feel about the current share price. Mary Sontrop was the only individual insider to sell over the last year.

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!

insider-trading-volume
ASX:IDT Insider Trading Volume April 8th 2022

I will like IDT Australia better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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. Insiders own 13% of IDT Australia shares, worth about AU$5.3m, according to our data. 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 IDT Australia Tell Us?

It doesn't really mean much that no insider has traded IDT Australia shares in the last quarter. We don't take much encouragement from the transactions by IDT Australia insiders. We also note that, as far as we can see, insider ownership is fairly low, compared to other companies. 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 2 warning signs for IDT Australia you should be aware of.

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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