Bullish insiders at Tempo Australia Limited (ASX:TPP) loaded up on AU$902k of stock earlier this year

Simply Wall St
·3 min read

Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Tempo Australia Limited (ASX:TPP), it sends a favourable message to the company's shareholders.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Tempo Australia

The Last 12 Months Of Insider Transactions At Tempo Australia

Over the last year, we can see that the biggest insider sale was by the insider, Anthony Barton, for AU$588k worth of shares, at about AU$0.074 per share. That means that an insider was selling shares at slightly below the current price (AU$0.077). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 25% of Anthony Barton's holding. The only individual insider seller over the last year was Anthony Barton.

In the last twelve months insiders purchased 11.88m shares for AU$902k. On the other hand they divested 8.00m shares, for AU$588k. In total, Tempo Australia insiders bought more than they sold over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
insider-trading-volume

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Tempo Australia Insiders Bought Stock Recently

Over the last quarter, Tempo Australia insiders have spent a meaningful amount on shares. Overall, two insiders shelled out AU$394k for shares in the company -- and none sold. That shows some optimism about the company's future.

Insider Ownership of Tempo Australia

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. It's great to see that Tempo Australia insiders own 49% of the company, worth about AU$14m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Tempo Australia Tell Us?

It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Tempo Australia insiders are well aligned, and quite possibly think the share price is too low. That's what I like to see! While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example, Tempo Australia has 3 warning signs (and 1 which shouldn't be ignored) we think you should know about.

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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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