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When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Altona Rare Earths Plc's (LON:REE) instance, it's good 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.
Our free stock report includes 5 warning signs investors should be aware of before investing in Altona Rare Earths. Read for free now.
The Last 12 Months Of Insider Transactions At Altona Rare Earths
The CFO & Director Louise Adrian made the biggest insider purchase in the last 12 months. That single transaction was for UK£53k worth of shares at a price of UK£0.016 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£0.014). 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. 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. Notably Louise Adrian was also the biggest seller.
In the last twelve months insiders purchased 4.21m shares for UK£66k. But they sold 3.31m shares for UK£53k. In total, Altona Rare Earths insiders bought more than they sold over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Check out our latest analysis for Altona Rare Earths
There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, 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. We usually like to see fairly high levels of insider ownership. Altona Rare Earths insiders own 45% of the company, currently worth about UK£1.1m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Altona Rare Earths Tell Us?
The fact that there have been no Altona Rare Earths insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. It would be great to see more insider buying, but overall it seems like Altona Rare Earths insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the 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. Case in point: We've spotted 5 warning signs for Altona Rare Earths you should be aware of, and 4 of these don't sit too well with us.