MD & Executive Director Phillip Britt Just Sold A Bunch Of Shares In Aussie Broadband Limited (ASX:ABB)

Some Aussie Broadband Limited (ASX:ABB) shareholders may be a little concerned to see that the MD & Executive Director, Phillip Britt, recently sold a substantial AU$4.2m worth of stock at a price of AU$2.60 per share. That diminished their holding by a very significant 100%, which arguably implies a strong desire to reallocate capital.

Check out our latest analysis for Aussie Broadband

The Last 12 Months Of Insider Transactions At Aussie Broadband

In fact, the recent sale by Phillip Britt was the biggest sale of Aussie Broadband shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at slightly below the current price (AU$2.71). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was 100% of Phillip Britt's stake.

The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

I will like Aussie Broadband better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with 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 1.7% of Aussie Broadband shares, worth about AU$8.7m, according to our data. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Whilst better than nothing, we're not overly impressed by these holdings.

So What Do The Aussie Broadband Insider Transactions Indicate?

The stark truth for Aussie Broadband is that there has been more insider selling than insider buying in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. Insiders own relatively few shares in the company, and when you consider the sales, we're not particularly excited about the stock. So we'd only buy after very careful consideration. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. While conducting our analysis, we found that Aussie Broadband has 2 warning signs and it would be unwise to ignore them.

Of course Aussie Broadband 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, but not derivative transactions.

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