Insider Buyers Lose AU$109k As Senetas Sheds AU$3.3m

Insiders who bought AU$365.9k worth of Senetas Corporation Limited's (ASX:SEN) stock at an average buy price of AU$0.026 over the last year may be disappointed by the recent 10.0% decrease in the stock. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth AU$256.4k, which is not what they expected.

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

We've discovered 3 warning signs about Senetas. View them for free.

Senetas Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Founder & Non Executive Chairman Francis Galbally bought AU$360k worth of shares at a price of AU$0.026 per share. That means that even when the share price was higher than AU$0.018 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. The only individual insider to buy over the last year was Francis Galbally. We note that Francis Galbally was both the biggest buyer and the biggest seller.

Francis Galbally bought a total of 14.25m shares over the year at an average price of AU$0.026. 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!

Check out our latest analysis for Senetas

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Senetas Insiders Are Selling The Stock

The last three months saw significant insider selling at Senetas. In total, Founder & Non Executive Chairman Francis Galbally dumped AU$145k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Insider Ownership

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. Senetas insiders own about AU$5.9m worth of shares. That equates to 20% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Senetas Insider Transactions Indicate?

An insider sold Senetas shares recently, but they didn't buy any. In contrast, they appear keener if you look at the last twelve months. And insiders do own shares. So the recent selling doesn't worry us too much. 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. For instance, we've identified 3 warning signs for Senetas (1 is a bit concerning) you should be aware of.

Of course Senetas may not be the best stock to buy. So you may wish to see this free collection of high quality 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.