When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Zoom2u Technologies Limited's (ASX:Z2U) instance, it's good news for shareholders.
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.
Zoom2u Technologies Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Founder Steve Orenstein bought AU$148k worth of shares at a price of AU$0.37 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.095). Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for 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 Zoom2u Technologies insiders were buying shares, but not selling. 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!
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.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Zoom2u Technologies insiders own 38% of the company, worth about AU$7.0m. 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 Zoom2u Technologies Insiders?
It doesn't really mean much that no insider has traded Zoom2u Technologies shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Zoom2u Technologies and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Zoom2u Technologies. At Simply Wall St, we've found that Zoom2u Technologies has 6 warning signs (2 are a bit unpleasant!) that deserve your attention before going any further with your analysis.
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.
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