Insider Sellers Might Regret Selling 5G Networks Shares at a Lower Price Than Current Market Value

Even though 5G Networks Limited (ASX:5GN) has fallen by 11% over the past week , insiders who sold AU$1.4m worth of stock over the past year have had less luck. The average selling price of AU$0.14 is still lower than the current share price, or in other words, insiders would have been better off holding on to their shares.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At 5G Networks

In the last twelve months, the biggest single sale by an insider was when the MD & Director, Joseph Demase, sold AU$1.4m worth of shares at a price of AU$0.14 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. It's of some comfort that this sale was conducted at a price well above the current share price, which is AU$0.057. So it may not shed much light on insider confidence at current levels. The only individual insider seller over the last year was Joseph Demase.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

See our latest analysis for 5G Networks

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Does 5G Networks Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. 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 5G Networks insiders own 35% of the company, worth about AU$5.2m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At 5G Networks Tell Us?

It doesn't really mean much that no insider has traded 5G Networks shares in the last quarter. Our analysis of 5G Networks insider transactions leaves us cautious. But we do like the fact that insiders own a fair chunk of the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing 5G Networks. When we did our research, we found 2 warning signs for 5G Networks (1 is a bit concerning!) that we believe deserve your full attention.

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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.