Terra Metals Insider Buyers See Boost After Market Cap Rose AU$7.9m
Terra Metals Limited (ASX:TM1) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 10.0% resulting in a AU$7.9m addition to the company’s market value. As a result, their original purchase of AU$1.18m worth of stock is now worth AU$3.24m.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At Terra Metals
Over the last year, we can see that the biggest insider purchase was by insider Kian Tat Goh for AU$993k worth of shares, at about AU$0.051 per share. We do like to see buying, but this purchase was made at well below the current price of AU$0.11. 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.
While Terra Metals insiders bought shares during the last year, they didn't sell. Their average price was about AU$0.04. It is certainly positive to see that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
View our latest analysis for Terra Metals
Terra Metals 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.
Does Terra Metals Boast High Insider Ownership?
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. We usually like to see fairly high levels of insider ownership. Terra Metals insiders own about AU$15m worth of shares. That equates to 17% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Terra Metals Tell Us?
It doesn't really mean much that no insider has traded Terra Metals shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Terra Metals and their transactions don't cause us concern. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Case in point: We've spotted 5 warning signs for Terra Metals you should be aware of, and 3 of them can't be ignored.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.