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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Empire Resources Limited (ASX:ERL).
Do Insider Transactions Matter?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
Check out our latest analysis for Empire Resources
The Last 12 Months Of Insider Transactions At Empire Resources
Over the last year, we can see that the biggest insider purchase was by Non-Executive Chairman Michael Ruane for AU$158k worth of shares, at about AU$0.099 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.014). 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. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
While Empire Resources insiders bought shares during the last year, they didn't sell. The average buy price was around AU$0.014. Although they bought at below the recent share price, it is good to see that insiders are willing to invest in the company. 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!
Empire Resources is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Empire Resources Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at Empire Resources. Not only was there no selling that we can see, but they collectively bought AU$71k worth of shares. This makes one think the business has some good points.