- New Zealand
The a2 Milk Company Limited's (NZSE:ATM) recent NZ$455m market cap decline means a loss of NZ$9.2k for insiders who bought this year
Insiders who acquired NZ$198k worth of The a2 Milk Company Limited's (NZSE:ATM) stock at an average price of NZ$6.60 in the past 12 months may be dismayed by the recent 9.1% price decline. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth NZ$189k, which is not what they expected.
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.
See our latest analysis for a2 Milk
The Last 12 Months Of Insider Transactions At a2 Milk
The Independent Non-Executive Director Philippa Greenwood made the biggest insider purchase in the last 12 months. That single transaction was for NZ$198k worth of shares at a price of NZ$6.60 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being NZ$6.29). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. 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. Philippa Greenwood was the only individual insider to buy shares in the last twelve months.
The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
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. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 0.5% of a2 Milk shares, worth about NZ$23m. 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 a2 Milk Insider Transactions Indicate?
There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in a2 Milk and their transactions don't cause us concern. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for a2 Milk.
But note: a2 Milk may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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, but not derivative transactions.
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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.
The a2 Milk Company Limited, together with its subsidiaries, sells A2 protein type branded milk and related products in Australia, New Zealand, China, other Asian countries, and the United States.
Excellent balance sheet with proven track record.