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Whilst it may not be a huge deal, we thought it was good to see that the Trek Metals Limited (ASX:TKM) Non-Executive Chairman, Anthony Leibowitz, recently bought AU$129k worth of stock, for AU$0.059 per share. Even though that isn't a massive buy, it did increase their holding by 74%, which is arguably a good sign.
The Last 12 Months Of Insider Transactions At Trek Metals
Notably, that recent purchase by Anthony Leibowitz is the biggest insider purchase of Trek Metals shares that we've seen in the last year. That means that an insider was happy to buy shares at around the current price of AU$0.061. 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. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for Trek Metals share holders is that insiders were buying at near the current price.
While Trek Metals insiders bought shares during the last year, they didn't sell. The average buy price was around AU$0.04. To my mind it is good that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Trek 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 Trek Metals
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 30% of Trek Metals shares, worth about AU$3.7m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The Trek Metals Insider Transactions Indicate?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest Trek Metals insiders are well aligned, and that they may think the share price is too low. 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. For example, Trek Metals has 4 warning signs (and 2 which are significant) we think you should know about.
But note: Trek Metals may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.
This article by Simply Wall St is general in nature. 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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