Insiders who bought AU$125.3k worth of ARC Funds Limited (ASX:ARC) stock in the last year recovered part of their losses as the stock rose by 18% last week. The purchase, however, has proven to be a pricey bet, with losses currently totalling AU$49k.
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.
ARC Funds Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when insider Michael Walker bought AU$100k worth of shares at a price of AU$0.11 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.065). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
In the last twelve months insiders purchased 1.17m shares for AU$125k. But they sold 641.18k shares for AU$63k. In the last twelve months there was more buying than selling by ARC Funds insiders. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
View our latest analysis for ARC Funds
ARC Funds is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
ARC Funds Insiders Bought Stock Recently
It's good to see that ARC Funds insiders have made notable investments in the company's shares. Not only was there no selling that we can see, but they collectively bought AU$105k worth of shares. This makes one think the business has some good points.
Insider Ownership Of ARC Funds
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that ARC Funds insiders own 37% of the company, worth about AU$2.2m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About ARC Funds Insiders?
The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest ARC Funds insiders are well aligned, and that they may think the share price is too low. 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. Case in point: We've spotted 5 warning signs for ARC Funds you should be aware of.
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 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.