Even if it's not a huge purchase, we think it was good to see that Kai-Chung Shaw, the Independent Non-Executive Director of Integral Diagnostics Limited (ASX:IDX) recently shelled out AU$80k to buy stock, at AU$1.81 per share. While that isn't the hugest buy, it actually boosted their shareholding by 157%, which is good to see.
The Last 12 Months Of Insider Transactions At Integral Diagnostics
Over the last year, we can see that the biggest insider purchase was by Independent Non-Executive Chairman James Hall for AU$101k worth of shares, at about AU$1.96 per share. That means that even when the share price was higher than AU$1.71 (the recent price), an insider wanted to purchase shares. 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. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
Integral Diagnostics insiders may have bought shares in the last year, but they didn't sell any. Their average price was about AU$2.16. These transactions suggest that insiders have considered the current price attractive. 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!
Check out our latest analysis for Integral Diagnostics
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
Does Integral Diagnostics Boast High 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. We usually like to see fairly high levels of insider ownership. From our data, it seems that Integral Diagnostics insiders own 1.6% of the company, worth about AU$10m. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We do generally prefer see higher levels of insider ownership.
What Might The Insider Transactions At Integral Diagnostics Tell Us?
It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest Integral Diagnostics insiders are well aligned, and that they may think the share price is too low. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Integral Diagnostics. Be aware that Integral Diagnostics is showing 3 warning signs in our investment analysis, and 1 of those is significant...
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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 of direct interests only, but not derivative transactions or indirect interests.
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