Lithium Universe Insider Buyers Net AU$27k Despite 17% Stock Decline
Insiders who bought Lithium Universe Limited (ASX:LU7) stock lover the last 12 months are probably not as affected by last week’s 17% loss. After accounting for the recent loss, the AU$258.9k worth of shares they purchased is now worth AU$286.3k, suggesting a good return on their investment.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
Lithium Universe Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by insider David Pevcic for AU$219k worth of shares, at about AU$0.004 per share. We do like to see buying, but this purchase was made at well below the current price of AU$0.005. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
While Lithium Universe insiders bought shares during the last year, they didn't sell. They paid about AU$0.0045 on average. It's great to see insiders putting their own cash into the company's stock, albeit at below the recent share price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
View our latest analysis for Lithium Universe
Lithium Universe 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.
Lithium Universe Insiders Bought Stock Recently
Over the last quarter, Lithium Universe insiders have spent a meaningful amount on shares. Specifically, insider David Pevcic bought AU$219k worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.
Does Lithium Universe Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Lithium Universe insiders own about AU$2.8m worth of shares. That equates to 35% 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.
So What Does This Data Suggest About Lithium Universe Insiders?
It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Given that insiders also own a fair bit of Lithium Universe we think they are probably pretty confident of a bright future. 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. Every company has risks, and we've spotted 5 warning signs for Lithium Universe you should know about.
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.