Insider Buyers Lose R639k As Afine Investments Sheds R36m

Insiders who bought R3.23m worth of Afine Investments Limited's (JSE:ANI) stock at an average buy price of R4.99 over the last year may be disappointed by the recent 11% decrease in the stock. 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 R2.59m, which is not what they expected.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Afine Investments

Afine Investments Insider Transactions Over The Last Year

The Independent Non-Executive Chairman Michael Watters made the biggest insider purchase in the last 12 months. That single transaction was for R3.1m worth of shares at a price of R5.00 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being R4.00). It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Michael Watters was the only individual insider to buy during the last year. We note that Michael Watters was both the biggest buyer and the biggest seller.

Michael Watters bought 648.01k shares over the last 12 months at an average price of R4.99. 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!

Afine Investments is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insider Ownership

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. It's great to see that Afine Investments insiders own 78% of the company, worth about R225m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Afine Investments Insiders?

It doesn't really mean much that no insider has traded Afine Investments shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, Afine Investments insiders feel good about the company's future. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Case in point: We've spotted 5 warning signs for Afine Investments you should be aware of.

Of course Afine Investments 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.