Simply Wall St

Insiders probably made the right decision by selling €571,000 worth of shares earlier this year as shares of Expert.ai SpA (BIT:EXAI) fell 20%.

Over the past year, insiders have sold €571,000 worth of Expert.ai SpA (BIT:EXAI) at an average price of €2.28 per share allowing them to get the most out of their money. The company’s market valuation shrank by 8.7 million euros after the share price fell 20% over the past week, but insiders were spared painful losses.

While we don’t believe shareholders should simply follow insider trades, logic dictates that you pay attention to whether insiders are buying or selling shares.

Before examining these insider trades, please note that our analysis indicates that EXAI is potentially undervalued!

Expert.ai insider trades over the past year

Over the past year, we can see that the biggest insider sale was by the founder, Marco Varone, for €320,000 of shares, at around €2.28 per share. Although insider selling is negative, for us it is even more negative if the stock is sold at a lower price. The silver lining is that this sale took place above the last price (€0.67). It is therefore difficult to draw a firm conclusion.

Expert.ai insiders did not buy any shares last year. You can see insider trading (by companies and individuals) over the past year illustrated in the table below. By clicking on the graph below, you will be able to see the precise detail of each insider trade!

BIT:EXAI Insider Trading Volume October 1, 2022

If you like buying stocks that insiders are buying, rather than selling, then you might love this free list of companies. (Hint: insiders bought them).

Insider ownership

For an ordinary shareholder, it is worth checking how many shares are held by company insiders. High insider participation often makes company management more concerned with the interests of shareholders. Insiders of Expert.ai hold approximately 5.9 million euros in shares. This equals 17% of the business. While this is a high but not exceptional level of insider ownership, it suffices to indicate some alignment between management and small shareholders.

So what do Expert.ai’s insider trades indicate?

The fact that there have been no Expert.ai insider trades recently certainly doesn’t bother us. Our analysis of Expert.ai’s insider trading leaves us cautious. The modest level of insider ownership is, at least, some comfort. So, while it is useful to know what insiders are doing in terms of buying or selling, it is also useful to know the risks that a particular company faces. When we did our research, we found 2 warning signs for Expert.ai (1 makes us a little uneasy!) which we believe deserve your full attention.

If you’d rather check out another company – one with potentially superior finances – then don’t miss this free list of attractive companies, which have a high return on equity and low debt.

For the purposes of this article, insiders are persons who report their transactions to the relevant regulatory body. We currently record open market transactions and private dispositions, but not derivative transactions.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

Valuation is complex, but we help make it simple.

Find out if Expert.ai is potentially overvalued or undervalued by viewing our full analysis, which includes fair value estimates, risks and warnings, dividends, insider trading and financial health.

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