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Insiders who purchased MetalsTech Limited (ASX:MTC) shares in the past 12 months are unlikely to be deeply impacted by the stock's 11% decline over the past week. After accounting for the recent loss, the AU$858k worth of shares they purchased is now worth AU$1.8m, suggesting a good return on their investment.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
MetalsTech Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Executive Chairman Russell Moran bought AU$840k worth of shares at a price of AU$0.14 per share. We do like to see buying, but this purchase was made at well below the current price of AU$0.29. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
While MetalsTech insiders bought shares during the last year, they didn't sell. 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).
Does MetalsTech Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 25% of MetalsTech shares, worth about AU$12m. 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 Does This Data Suggest About MetalsTech 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. Insiders do have a stake in MetalsTech 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. When we did our research, we found 6 warning signs for MetalsTech (3 are a bit unpleasant!) that we believe deserve your full attention.
But note: MetalsTech 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.
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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.