Hopeful Week For Insiders Who Bought AU$984.8k Of X2M Connect Stock

Some of the losses seen by insiders who purchased AU$984.8k worth of X2M Connect Limited (ASX:X2M) shares over the past year were recovered after the stock increased by 14% over the past week. The purchase, however, has proven to be a pricey bet, with losses currently totalling AU$250k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

X2M Connect Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Andrew Grieg bought AU$533k worth of shares at a price of AU$0.069 per share. That means that an insider was happy to buy shares at above the current price of AU$0.016. 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 if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

X2M Connect insiders may have bought shares in the last year, but they didn't sell any. Their average price was about AU$0.021. This is nice to see since it implies that insiders might see value around current prices. 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 X2M Connect

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).

X2M Connect Insiders Bought Stock Recently

It's good to see that X2M Connect insiders have made notable investments in the company's shares. insider Andrew Grieg spent AU$437k on stock, and there wasn't any selling. This makes one think the business has some good points.

Does X2M Connect Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 21% of X2M Connect shares, worth about AU$2.3m. 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 Does This Data Suggest About X2M Connect Insiders?

The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Given that insiders also own a fair bit of X2M Connect we think they are probably pretty confident of a bright future. 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. At Simply Wall St, we've found that X2M Connect has 5 warning signs (4 make us uncomfortable!) that deserve your attention before going any further with your analysis.

Of course X2M Connect 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.