Yahoo Finance As Traka Resources Limited (ASX:TKL) gains 33%, insiders who bought last year may be wishing they had bet higher
Traka Resources Limited (ASX:TKL) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 33%, resulting in a AU$2.5m rise in the company's market capitalisation. Put another way, the original AU$255k acquisition is now worth AU$255k.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
See our latest analysis for Traka Resources
Traka Resources Insider Transactions Over The Last Year
The Independent Non-Executive Chairman Joshua Pitt made the biggest insider purchase in the last 12 months. That single transaction was for AU$128k worth of shares at a price of AU$0.016 each. That means that an insider was happy to buy shares at around the current price of AU$0.016. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. In this case we're pleased to report that the insider purchases were made at close to current prices.
Traka Resources insiders may have bought shares in the last year, but they didn't sell any. 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!
Traka Resources is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership of Traka Resources
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Traka Resources insiders own 28% of the company, worth about AU$2.8m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Traka Resources Tell Us?
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 Traka Resources 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. Our analysis shows 5 warning signs for Traka Resources (4 make us uncomfortable!) and we strongly recommend you look at them before investing.
But note: Traka 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.
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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.
