Pathkey.AI Drops To AU$0.016, Yet Insiders May Have Sold Too Early

Despite the fact that Pathkey.AI Ltd's (ASX:PKY) value has dropped 11% in the last week insiders who sold AU$564k worth of stock in the past 12 months have had less success. Given that the average selling price of AU$0.027 is still lower than the current share price, insiders would probably have been better off keeping their shares.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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The Last 12 Months Of Insider Transactions At Pathkey.AI

In the last twelve months, the biggest single sale by an insider was when the insider, Niv Dagan, sold AU$450k worth of shares at a price of AU$0.03 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of AU$0.016. So it may not tell us anything about how insiders feel about the current share price.

Over the last year we saw more insider selling of Pathkey.AI shares, than buying. The average sell price was around AU$0.027. It is certainly not great to see that insiders have sold shares in the company. But we note that the selling, on average, was at well above the recently traded price of AU$0.016. 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!

See our latest analysis for Pathkey.AI

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Insiders At Pathkey.AI Have Sold Stock Recently

The last three months saw significant insider selling at Pathkey.AI. In total, insider Saurabh Jain dumped AU$114k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Pathkey.AI insiders own 42% of the company, worth about AU$2.1m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Pathkey.AI Tell Us?

An insider hasn't bought Pathkey.AI stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Pathkey.AI. Our analysis shows 7 warning signs for Pathkey.AI (6 can't be ignored!) and we strongly recommend you look at these before investing.

But note: Pathkey.AI 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.