Insiders Enjoy AU$373k Return After Buying IRIS Metals Stock
Insiders who bought IRIS Metals Limited (ASX:IR1) in the last 12 months may probably not pay attention to the stock's recent 26% drop. Reason being, despite the recent loss, insiders original purchase value of AU$924.4k is now worth AU$1.30m.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
IRIS Metals Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Independent Non-Executive Director Anthony Collins bought AU$500k worth of shares at a price of AU$0.085 per share. We do like to see buying, but this purchase was made at well below the current price of AU$0.17. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
In the last twelve months IRIS Metals insiders were buying shares, but not selling. They paid about AU$0.12 on average. It is certainly positive to see that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
See our latest analysis for IRIS Metals
IRIS Metals is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Insiders At IRIS Metals Have Bought Stock Recently
Over the last quarter, IRIS Metals insiders have spent a meaningful amount on shares. Independent Non-Executive Director Anthony Collins spent AU$500k on stock, and there wasn't any selling. This could be interpreted as suggesting a positive outlook.
Insider Ownership Of IRIS Metals
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with 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. IRIS Metals insiders own about AU$9.5m worth of shares. That equates to 23% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At IRIS Metals Tell Us?
It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Insiders likely see value in IRIS Metals shares, given these transactions (along with notable insider ownership of 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. When we did our research, we found 5 warning signs for IRIS Metals (3 are a bit concerning!) that we believe deserve your full attention.
Of course IRIS Metals may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.