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Getting worried about all the insider selling on AIM?

18/05/2017 · AB Dynamics (ABDP)  · Alpha FX Group PLC (AFX)  · Character Group PLC (CCT)  · Eddie Stobart Logistics PLC (ESL)  · Gamma Communications PLC (GAMA)  · Gear4music (G4M)  · K3 Capital Group PLC (K3C)  · Quixant PLC (QXT)  · Ramsdens Holdings PLC (RFX)  · Watkin Jones PLC (WJG) 

Getting worried about all the insider selling on AIM?
Perhaps you should be! The growing number of Director and insider selling from AIM companies looks increasingly worrying to us and could offer another glimpse of a market that is now getting seriously overheated in places. We offer a few thoughts and highlight some of the bigger sellers.

The latest secondary placing of 839,000 shares by Directors at Gear4music (AIM:G4M) at 690p (a modest 2% discount to the current share price), is surely illustrative of a market that is starting to run away with itself. As we commented in our recent Blog, we are big fans of Gear4music, whose shares have soared over 400% over the past 12 months resulting in the current market capitalisation approx. £140m and a rich rating of nearly 65x forecast February 2018 earnings or a mere 50x for 2019. The secondary place was accompanied by a raise of £4.2m of new money, at the same price. Evidently existing holders were happy to support at the current stratospheric price, rather than see the value of their position take a hit!

The 2017 IPOs of Ramsdens Holdings (AIM:RFX), Alpha FX Group (AIM:AFX), K3 Capital Group PLC (AIM:K3C), Eddie Stobart Logistics PLC (AIM:ESL) and most recently Velocity Composites (AIM:VEL), have all seen some sizeable vendor…

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