April 25, 2024
Investments

Insiders’ AU$2.42m Investments In Red Following Terragen Holdings’ AU$1.1m Dip In Market Value


Insiders who acquired AU$2.42m worth of Terragen Holdings Limited’s (ASX:TGH) stock at an average price of AU$0.024 in the past 12 months may be dismayed by the recent 15% price decline. 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 AU$1.71m, which is not what they expected.

Although we don’t think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Terragen Holdings

The Last 12 Months Of Insider Transactions At Terragen Holdings

Over the last year, we can see that the biggest insider purchase was by Director Scobie Dickinson Ward for AU$2.0m worth of shares, at about AU$0.024 per share. That means that an insider was happy to buy shares at above the current price of AU$0.017. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. We always take careful note of the price insiders pay when purchasing shares. 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.

Terragen Holdings insiders may have bought shares in the last year, but they didn’t sell any. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Have Terragen Holdings Insiders Traded Recently?

CEO & MD Miles Brennan bought just AU$720 worth of shares in that time. That’s not much at all. So it is hard to draw any conclusion about how insiders are feeling about the stock, from these recent trades.

Insider Ownership Of Terragen Holdings

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. Terragen Holdings insiders own 43% of the company, currently worth about AU$2.7m based on the recent share price. 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 Terragen Holdings Insiders?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. Overall the buying isn’t worth writing home about. On a brighter note, the transactions over the last year are encouraging. With high insider ownership and encouraging transactions, it seems like Terragen Holdings insiders think the business has merit. 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 Terragen Holdings you should be aware of, and 3 of these make us uncomfortable.

But note: Terragen Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.

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.



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