Despite Stelar Metals' Pullback, Insiders Still Gained AU$546k
Insiders who purchased Stelar Metals Limited (ASX:SLB) shares in the past 12 months are unlikely to be deeply impacted by the stock's 10% decline over the past week. After taking the recent loss into consideration, the AU$324.8k worth of stock they bought is now worth AU$870.9k, indicating that their investment yielded a positive return.
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.
Stelar Metals Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by insider Kim Wilhelm for AU$325k worth of shares, at about AU$0.08 per share. Even though the purchase was made at a significantly lower price than the recent price (AU$0.21), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
Check out our latest analysis for Stelar Metals
Stelar 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.
Insiders At Stelar Metals Have Bought Stock Recently
Over the last three months, we've seen significantly more insider buying, than insider selling, at Stelar Metals. We can see that insider Kim Wilhelm paid AU$325k for shares in the company. But insider Kim Wilhelm sold shares worth AU$23k. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.
Does Stelar Metals Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Stelar Metals insiders own about AU$6.4m worth of shares (which is 44% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Stelar Metals Tell Us?
The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Stelar Metals. One for the watchlist, at least! 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 4 warning signs for Stelar Metals (3 shouldn't be ignored!) that we believe deserve your full attention.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.