Insider Buying: The Advanced Braking Technology Limited (ASX:ABV) Non-Executive Director Just Bought 3.1% More Shares

Whilst it may not be a huge deal, we thought it was good to see that the Advanced Braking Technology Limited (ASX:ABV) Non-Executive Director, David Slack, recently bought AU$88k worth of stock, for AU$0.041 per share. Although the purchase is not a big one, increasing their shareholding by only 3.1%, it can be interpreted as a good sign.

Check out the opportunities and risks within the AU Auto Components industry.

Advanced Braking Technology Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Keith Knowles bought AU$169k worth of shares at a price of AU$0.038 per share. That means that an insider was happy to buy shares at around the current price of AU$0.04. Of course they may have changed their mind. But this suggests they are optimistic. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. Happily, the Advanced Braking Technology insiders decided to buy shares at close to current prices. Notably Keith Knowles was also the biggest seller.

Happily, we note that in the last year insiders paid AU$511k for 14.95m shares. But they sold 301.02k shares for AU$9.6k. In the last twelve months there was more buying than selling by Advanced Braking Technology insiders. The average buy price was around AU$0.034. To my mind it is good that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. 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!

Advanced Braking Technology is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does Advanced Braking Technology Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Advanced Braking Technology insiders own about AU$8.0m worth of shares (which is 53% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Advanced Braking Technology Insider Transactions Indicate?

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Advanced Braking Technology. That's what I like to see! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Advanced Braking Technology. While conducting our analysis, we found that Advanced Braking Technology has 1 warning sign and it would be unwise to ignore this.

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, but not derivative transactions.

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.

Comments are closed.