Keep An Eye On Locate Technologies As Insider Stock Selling Hits AU$1.2m

Even though Locate Technologies Limited (ASX:LOC) stock gained 17% last week, insiders who sold AU$1.2m worth of stock over the past year are probably better off. Holding on to stock would have meant their investment would be worth less now than it was at the time of sale. Thus selling at an average price of AU$0.12, which is higher than the current price, may have been the best decision.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At Locate Technologies

Over the last year, we can see that the biggest insider sale was by the insider, Damian Degenhardt, for AU$1.2m worth of shares, at about AU$0.12 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. The silver lining is that this sell-down took place above the latest price (AU$0.068). So it may not shed much light on insider confidence at current levels. Damian Degenhardt was the only individual insider to sell shares in the last twelve months.

Happily, we note that in the last year insiders paid AU$185k for 2.67m shares. But they sold 9.43m shares for AU$1.2m. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

View our latest analysis for Locate Technologies

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Does Locate Technologies Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Locate Technologies insiders own 42% of the company, worth about AU$6.9m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Locate Technologies Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. While we feel good about high insider ownership of Locate Technologies, we can't say the same about the selling of shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Locate Technologies. At Simply Wall St, we've found that Locate Technologies has 4 warning signs (1 is significant!) that deserve your attention before going any further with your analysis.

But note: Locate Technologies 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.