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Trade Alert: The Independent Director Of Deep-South Resources Inc. (CVE:DSM), Thomas Tumoscheit, Has Just Spent CA$62k Buying A Few More Shares

Simply Wall St
·3-min read

Even if it's not a huge purchase, we think it was good to see that Thomas Tumoscheit, the Independent Director of Deep-South Resources Inc. (CVE:DSM) recently shelled out CA$62k to buy stock, at CA$0.05 per share. Although the purchase is not a big one, by either a percentage standpoint or absolute value, it can be seen as a good sign.

Check out our latest analysis for Deep-South Resources

Deep-South Resources Insider Transactions Over The Last Year

In fact, the recent purchase by Thomas Tumoscheit was the biggest purchase of Deep-South 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 CA$0.045 (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. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Thomas Tumoscheit was the only individual insider to buy during the last year.

You can see a visual depiction of insider transactions (by 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!

TSXV:DSM Recent Insider Trading April 8th 2020
TSXV:DSM Recent Insider Trading April 8th 2020

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).

Insider Ownership of Deep-South Resources

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. From what we can see in our data, insiders own only about CA$28k worth of Deep-South Resources shares. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. This level of insider ownership is notably low, and not very encouraging.

What Might The Insider Transactions At Deep-South Resources Tell Us?

It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Deep-South Resources stock. 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. Every company has risks, and we've spotted 4 warning signs for Deep-South Resources (of which 2 are concerning!) you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.