Insider Buyers Lose AU$60k As ACDC Metals Sheds AU$601k
Insiders who acquired AU$412.4k worth of ACDC Metals Limited's (ASX:ADC) stock at an average price of AU$0.049 in the past 12 months may be dismayed by the recent 11% price decline. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth AU$352.4k which is not ideal.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At ACDC Metals
The insider Jonathan Rosham made the biggest insider purchase in the last 12 months. That single transaction was for AU$326k worth of shares at a price of AU$0.05 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.042). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
In the last twelve months ACDC Metals insiders were buying shares, but not selling. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
See our latest analysis for ACDC Metals
ACDC 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.
Insider Ownership Of ACDC Metals
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 19% of ACDC Metals shares, worth about AU$970k. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About ACDC Metals Insiders?
It doesn't really mean much that no insider has traded ACDC Metals shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think ACDC Metals insiders are doubting the company, and they do own shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - ACDC Metals has 4 warning signs we think you should be aware of.
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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