Insiders are probably glad they sold their shares in The a2 Milk Company Limited (NZSE:ATM) after 6.1% drop

By
Simply Wall St
Published
April 27, 2022
NZSE:ATM
Source: Shutterstock

Insiders at The a2 Milk Company Limited (NZSE:ATM) sold NZ$265k worth of stock at an average price of NZ$6.62 a share over the past year, making the most of their investment. The company’s market cap plunged by NZ$231m after price dropped by 6.1% last week but insiders were able to limit their loss to an extent.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for a2 Milk

a2 Milk Insider Transactions Over The Last Year

The insider, Kevin Bush, made the biggest insider sale in the last 12 months. That single transaction was for NZ$265k worth of shares at a price of NZ$6.67 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is NZ$4.81. So it may not shed much light on insider confidence at current levels. Kevin Bush 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. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
NZSE:ATM Insider Trading Volume April 27th 2022

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Does a2 Milk Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. a2 Milk insiders own about NZ$16m worth of shares. That equates to 0.4% 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 Does This Data Suggest About a2 Milk Insiders?

It doesn't really mean much that no insider has traded a2 Milk shares in the last quarter. We don't take much encouragement from the transactions by a2 Milk insiders. But we do like the fact that insiders own a fair chunk of the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing a2 Milk. To assist with this, we've discovered 3 warning signs that you should run your eye over to get a better picture of a2 Milk.

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, but not derivative transactions.

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