Yahoo Finance Quite a few insiders invested in Power Metal Resources plc (LON:POW) last year which is positive news for shareholders
It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Power Metal Resources plc's (LON:POW) case, it's fantastic news for shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.
View our latest analysis for Power Metal Resources
The Last 12 Months Of Insider Transactions At Power Metal Resources
Over the last year, we can see that the biggest insider purchase was by Non-Executive Director Edmund Charles Shaw for UK£82k worth of shares, at about UK£0.021 per share. That means that an insider was happy to buy shares at above the current price of UK£0.0083. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. 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. We note that Edmund Charles Shaw was both the biggest buyer and the biggest seller.
In the last twelve months insiders purchased 6.85m shares for UK£137k. But they sold 4.60m shares for UK£94k. Overall, Power Metal Resources insiders were net buyers during the last year. 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!
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 of Power Metal Resources
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data indicates that Power Metal Resources insiders own about UK£1.3m worth of shares (which is 11% of the company). Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
So What Does This Data Suggest About Power Metal Resources Insiders?
There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. We'd like to see bigger individual holdings. However, we don't see anything to make us think Power Metal Resources insiders are doubting the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Power Metal Resources. When we did our research, we found 5 warning signs for Power Metal Resources (1 shouldn't be ignored!) that we believe deserve your full attention.
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, but not derivative transactions.
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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.
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