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We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Weebit Nano Limited (ASX:WBT).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'
View our latest analysis for Weebit Nano
Weebit Nano Insider Transactions Over The Last Year
The insider, Amiram Bornstein, made the biggest insider sale in the last 12 months. That single transaction was for AU$635k worth of shares at a price of AU$0.96 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (AU$0.40). So it is hard to draw any strong conclusion from it.
In the last twelve months insiders purchased 85714.28 shares for AU$75k. On the other hand they divested 2.3m shares, for AU$1.6m. In total, Weebit Nano insiders sold more than they bought over the last year. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Does Weebit Nano Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Weebit Nano insiders own 28% of the company, worth about AU$7.4m. 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 Weebit Nano Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Weebit Nano shares in the last quarter. We don't take much encouragement from the transactions by Weebit Nano insiders. The modest level of insider ownership is, at least, some comfort. Along with insider transactions, I recommend checking if Weebit Nano is growing revenue. This free chart of historic revenue and earnings should make that easy.