We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Advance NanoTek Limited (ASX:ANO), you may well want to know whether insiders have been buying or selling.

What Is Insider Buying?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

Check out our latest analysis for Advance NanoTek

Advance NanoTek Insider Transactions Over The Last Year

The Non-Executive Chairman Lev Mizikovsky made the biggest insider purchase in the last 12 months. That single transaction was for AU$257k worth of shares at a price of AU$4.20 each. That implies that an insider found the current price of AU$4.38 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the Advance NanoTek insider decided to buy shares at close to current prices. Lev Mizikovsky was the only individual insider to buy shares in the last twelve months.

Lev Mizikovsky purchased 162.76k shares over the year. The average price per share was AU$2.87. 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!

Advance NanoTek is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Advance NanoTek Insiders Are Selling The Stock

We have seen a bit of insider selling at Advance NanoTek, over the last three months. The selling netted AU$207k for MD, Company Secretary & Executive Director Geoffrey Acton. But AU$157k was spent on buying, too, . While it's not great to see insider selling, the net amount sold isn't enough for us to want to read anything into it.

Does Advance NanoTek 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. Advance NanoTek insiders own about AU$156m worth of shares (which is 59% of the company). 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 Advance NanoTek Tell Us?

Our data shows a little more insider selling than buying in the last three months. But the difference isn't enough to have us worried. However, our analysis of transactions over the last year is heartening. Judging from their transactions, and high insider ownership, Advance NanoTek insiders feel good about the company's future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 3 warning signs for Advance NanoTek you should be aware of, and 1 of them is a bit concerning.

But note: Advance NanoTek 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, but not derivative transactions.

This article by Simply Wall St is general in nature. 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.

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