Reversal Of Fortune For ADVFN Insiders Who Made A UK£1.07m Purchase

Some of the losses seen by insiders who purchased UK£1.07m worth of ADVFN Plc (LON:AFN) shares over the past year were recovered after the stock increased by 52% over the past week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled UK£505k since the time of purchase.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for ADVFN

The Last 12 Months Of Insider Transactions At ADVFN

Over the last year, we can see that the biggest insider purchase was by CEO & Executive Director Amit Tauman for UK£726k worth of shares, at about UK£0.33 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£0.17). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Amit Tauman was the only individual insider to buy shares in the last twelve months.

Amit Tauman purchased 3.26m shares over the year. The average price per share was UK£0.33. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart 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 growing companies that insiders are buying.

Insider Ownership Of ADVFN

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It's great to see that ADVFN insiders own 42% of the company, worth about UK£3.4m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At ADVFN Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, ADVFN insiders feel good about the company's future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 4 warning signs for ADVFN (3 are significant!) that we believe deserve your full attention.

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.