Axiom Properties Insider Stock Sellers Must Be Relieved As Market Cap Falls To AU$22m

Insiders seem to have made the most of their holdings by selling AU$435k worth of Axiom Properties Limited (ASX:AXI) stock at an average sell price of AU$0.04 during the past year. The company's market worth decreased by AU$3.9m over the past week after the stock price dropped 15%, although insiders were able to minimize their losses

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Axiom Properties

The Last 12 Months Of Insider Transactions At Axiom Properties

Over the last year, we can see that the biggest insider sale was by the insider, John Howe, for AU$250k worth of shares, at about AU$0.05 per share. That means that even when the share price was slightly below the current price of AU$0.051, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was 54% of John Howe's stake.

In total, Axiom Properties insiders sold more than they bought over the last year. The average sell price was around AU$0.04. We don't gain confidence from insider selling below the recent share price. Since insiders sell for many reasons, we wouldn't put too much weight on it. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Axiom Properties Insiders Bought Stock Recently

There has been significantly more insider buying, than selling, at Axiom Properties, over the last three months. MD & Executive Director Benjamin Laurance spent AU$309k on stock. But MD & Executive Director Benjamin Laurance sold shares worth AU$185k. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.

Insider Ownership Of Axiom Properties

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 40% of Axiom Properties shares, worth about AU$8.8m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Axiom Properties Insider Transactions Indicate?

The recent insider purchase is heartening. But we can't say the same for the transactions over the last 12 months. While recent transactions indicate confidence in Axiom Properties, insiders don't own enough of the company to overcome our cautiousness about the longer term transactions. In short they are likely aligned with shareholders. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 4 warning signs for Axiom Properties (of which 2 are a bit concerning!) you should know about.

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 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.