Aluula Composites Insiders Who Sold Avert CA$11m Market Cap Dip

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 worth decreased by CA$11m over the past week after the stock price dropped 12%, although insiders were able to minimize their losses

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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The Last 12 Months Of Insider Transactions At Aluula Composites

Over the last year, we can see that the biggest insider sale was by the Founder & Director, Richard Myerscough, for CA$777k worth of shares, at about 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$2.85. 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 the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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.

Are Aluula Composites Insiders Buying Or Selling?

We've only seen a tiny insider purchase valued at CA$3.0k, in the last three months. Looking at the net result, we don't think these recent trades shed much light on how insiders, as a group, are feeling about the company's prospects.

Insider Ownership Of Aluula Composites

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Aluula Composites insiders own about CA$22m worth of shares. That equates to 30% of the company. 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 Do The Aluula Composites Insider Transactions Indicate?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. That said, the purchases were not large. Our analysis of Aluula Composites insider transactions leaves us cautious. But we do like the fact that insiders own a fair chunk of the company. While it's good to be aware of 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. To help with this, we've discovered 6 warning signs (3 are a bit unpleasant!) that you ought to be aware of before buying any shares in Aluula Composites.

Of course Aluula Composites 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.