Don't Ignore The Insider Selling In Hennessy Advisors

Anyone interested in Hennessy Advisors, Inc. (NASDAQ:HNNA) should probably be aware that the Independent Director, Susan Pomilia, recently divested US$100k worth of shares in the company, at an average price of US$9.80 each. On the bright side, that sale was only 9.4% of their holding, so we doubt it's very meaningful, on its own.

See our latest analysis for Hennessy Advisors

The Last 12 Months Of Insider Transactions At Hennessy Advisors

In fact, the recent sale by Susan Pomilia was the biggest sale of Hennessy Advisors shares made by an insider individual in the last twelve months, according to our records. So we know that an insider sold shares at around the present share price of US$9.81. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

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!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Hennessy Advisors insiders own 41% of the company, currently worth about US$31m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Hennessy Advisors Tell Us?

An insider sold Hennessy Advisors shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. On the plus side, Hennessy Advisors makes money, and is growing profits. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about 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 that end, you should learn about the 2 warning signs we've spotted with Hennessy Advisors (including 1 which is a bit unpleasant).

Of course Hennessy Advisors 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.