Insiders were net buyers of Alma Metals Limited’s (ASX:ALM ) stock during the past year. That is, insiders bought more stock than they sold.
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.
Check out our latest analysis for Alma Metals
Alma Metals Insider Transactions Over The Last Year
In fact, the recent purchase by Executive Chairman Alasdair Cooke was not their only acquisition of Alma Metals shares this year. Earlier in the year, they paid AU$0.01 per share in a AU$100k purchase. That means that even when the share price was higher than AU$0.009 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it’s very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Alasdair Cooke was the only individual insider to buy during the last year.
Alasdair Cooke purchased 36.65m shares over the year. The average price per share was AU$0.0097. 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!
Alma Metals is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership Of Alma 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. We usually like to see fairly high levels of insider ownership. It appears that Alma Metals insiders own 18% of the company, worth about AU$1.8m. 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 Alma Metals Tell Us?
It is good to see the recent insider purchase. And the longer term insider transactions also give 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 Alma Metals we think they are probably pretty confident of a bright future. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. Every company has risks, and we’ve spotted 5 warning signs for Alma Metals (of which 4 make us uncomfortable!) you should know about.
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.
