Zimi's Market Cap Up AU$387k Following Year Of Insider Stock Buying

Zimi Limited (ASX:ZMM) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 10.0% resulting in a AU$387k addition to the company’s market value. As a result, the stock they originally bought for AU$387.5k is now worth AU$426.3k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Zimi

Zimi Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider Todd Milliner for AU$362k worth of shares, at about AU$0.01 per share. That means that an insider was happy to buy shares at around the current price of AU$0.011. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for Zimi share holders is that insiders were buying at near the current price.

In the last twelve months Zimi 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. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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

Does Zimi Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. 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 36% of Zimi shares, worth about AU$1.6m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Zimi Insiders?

It doesn't really mean much that no insider has traded Zimi shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Zimi and we see no evidence to suggest they are worried about the 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. You'd be interested to know, that we found 4 warning signs for Zimi and we suggest you have a look.

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 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.