Even if it's not a huge purchase, we think it was good to see that William Paul Wavish, the Non-Executive Chairman of Alfabs Australia Limited (ASX:AAL) recently shelled out AU$100k to buy stock, at AU$0.35 per share. Although the purchase is not a big one, increasing their shareholding by only 7.6%, it can be interpreted as a good sign.

Check out our latest analysis for Alfabs Australia

The Last 12 Months Of Insider Transactions At Alfabs Australia

Notably, that recent purchase by William Paul Wavish is the biggest insider purchase of Alfabs Australia shares that we've seen in the last year. We do like to see buying, but this purchase was made at well below the current price of AU$0.39. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Alfabs Australia insiders may have bought shares in the last year, but they didn't sell any. 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 undervalued small cap companies that insiders are buying.

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. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data indicates that Alfabs Australia insiders own about AU$13m worth of shares (which is 12% of the company). However, it's possible that insiders might have an indirect interest through a more complex structure. Whilst better than nothing, we're not overly impressed by these holdings.

So What Do The Alfabs Australia Insider Transactions Indicate?

It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. When combined with notable insider ownership, these factors suggest Alfabs Australia insiders are well aligned, and that they may think the share price is too low. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 3 warning signs for Alfabs Australia you should know about.

But note: Alfabs Australia 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.

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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.