Bullish insiders at Home Consortium Limited (ASX:HMC) loaded up on AU$6.4m of stock earlier this year

By
Simply Wall St
Published
March 08, 2022
ASX:HMC
Source: Shutterstock

Over the last year, a good number of insiders have significantly increased their holdings in Home Consortium Limited (ASX:HMC). This is encouraging because it indicates that insiders are more optimistic about the company's prospects.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Home Consortium

The Last 12 Months Of Insider Transactions At Home Consortium

Over the last year, we can see that the biggest insider purchase was by Non-Executive Director Isaac Fried for AU$5.6m worth of shares, at about AU$7.66 per share. That means that an insider was happy to buy shares at above the current price of AU$6.72. 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. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

In the last twelve months Home Consortium insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
ASX:HMC Insider Trading Volume March 8th 2022

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insiders at Home Consortium Have Bought Stock Recently

It's good to see that Home Consortium insiders have made notable investments in the company's shares. We can see that MD, CEO & Director David Di Pilla paid AU$501k for shares in the company. No-one sold. This makes one think the business has some good points.

Insider Ownership of Home Consortium

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Home Consortium insiders own 8.0% of the company, worth about AU$165m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Home Consortium Insider Transactions Indicate?

The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Home Consortium. Nice! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 1 warning sign with Home Consortium and understanding this should be part of your investment process.

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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