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Non-Independent Non-Executive Director Ross Stanley Just Bought 2.8% More Shares In Emerald Resources NL (ASX:EMR)

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Emerald Resources NL (ASX:EMR) shareholders (or potential shareholders) will be happy to see that the Non-Independent Non-Executive Director, Ross Stanley, recently bought a whopping AU$1.1m worth of stock, at a price of AU$1.08. There's no denying a buy of that magnitude suggests conviction in a brighter future, although we do note that proportionally it only increased their holding by 2.8%.

Check out our latest analysis for Emerald Resources

Emerald Resources Insider Transactions Over The Last Year

In fact, the recent purchase by Ross Stanley was the biggest purchase of Emerald Resources shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was higher than AU$1.07 (the recent price), an insider wanted to purchase shares. 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. 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.

In the last twelve months Emerald Resources insiders were buying shares, but not selling. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
insider-trading-volume

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 Emerald Resources Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Emerald Resources insiders own 21% of the company, worth about AU$122m. 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 Emerald Resources Insiders?

The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Emerald Resources. That's what I like to see! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Emerald Resources. Case in point: We've spotted 4 warning signs for Emerald Resources you should be aware of, and 2 of these shouldn't be ignored.

But note: Emerald Resources 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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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