Bullish X2M Connect Insider Buying Worth AU$981.8k Yet To Pay Off

Insiders who bought AU$981.8k worth of X2M Connect Limited's (ASX:X2M) stock at an average buy price of AU$0.021 over the last year may be disappointed by the recent 20% decrease in the stock. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth AU$366.7k, which is not what they expected.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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X2M Connect Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider Andrew Grieg for AU$533k worth of shares, at about AU$0.069 per share. That means that even when the share price was higher than AU$0.008 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Andrew Grieg was the only individual insider to buy shares in the last twelve months.

Andrew Grieg bought a total of 45.84m shares over the year at an average price of AU$0.021. 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 X2M Connect

X2M Connect is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data indicates that X2M Connect insiders own about AU$1.2m worth of shares (which is 15% of the company). We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Whilst better than nothing, we're not overly impressed by these holdings.

What Might The Insider Transactions At X2M Connect Tell Us?

It doesn't really mean much that no insider has traded X2M Connect shares in the last quarter. However, our analysis of transactions over the last year is heartening. We'd like to see bigger individual holdings. However, we don't see anything to make us think X2M Connect insiders are doubting the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that X2M Connect is showing 5 warning signs in our investment analysis, and 4 of those are potentially serious...

But note: X2M Connect 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.