Aluula Composites Insiders Selling CA$777k In Stock Relieved As Market Cap Slides To CA$20m

Insiders seem to have made the most of their holdings by selling CA$777k worth of Aluula Composites Inc. (CVE:AUUA) stock at an average sell price of CA$0.39 during the past year. The company’s market cap plunged by CA$2.3m after price dropped by 10.0% last week but insiders were able to limit their loss to an extent.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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Aluula Composites Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Founder & Director, Richard Myerscough, sold CA$777k worth of shares at a price of CA$0.40 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of CA$0.81. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 21% of Richard Myerscough's holding. Richard Myerscough was the only individual insider to sell over the last year.

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!

See our latest analysis for Aluula Composites

I will like Aluula Composites better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insiders At Aluula Composites Have Sold Stock Recently

The last three months saw significant insider selling at Aluula Composites. Specifically, Founder & Director Richard Myerscough ditched CA$777k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Aluula Composites insiders own about CA$6.4m worth of shares. That equates to 31% 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 Aluula Composites Insider Transactions Indicate?

An insider sold Aluula Composites shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! 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. To that end, you should learn about the 7 warning signs we've spotted with Aluula Composites (including 4 which are a bit concerning).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.