Yahoo Finance Insiders Give Up US$132k As Bradda Head Lithium Stock Drops To UK£0.029
Insiders who acquired US$360k worth of Bradda Head Lithium Limited's (LON:BHL) stock at an average price of US$0.045 in the past 12 months may be dismayed by the recent 22% price decline. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth US$228k, which is not what they expected.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for Bradda Head Lithium
Bradda Head Lithium Insider Transactions Over The Last Year
The Non-Executive Deputy Chairman James Mellon made the biggest insider purchase in the last 12 months. That single transaction was for UK£360k worth of shares at a price of UK£0.045 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£0.029). 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. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. The only individual insider to buy over the last year was James Mellon.
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!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Bradda Head Lithium insiders own 33% of the company, worth about UK£3.7m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Bradda Head Lithium Tell Us?
The fact that there have been no Bradda Head Lithium insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Bradda Head Lithium and their transactions don't cause us concern. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. At Simply Wall St, we've found that Bradda Head Lithium has 5 warning signs (3 are potentially serious!) that deserve your attention before going any further with your analysis.
Of course Bradda Head Lithium may not be the best stock to buy. So you may wish to see this free collection of high quality 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.
