Insiders who bought Vanadium Resources Limited (ASX:VR8) in the last 12 months may probably not pay attention to the stock's recent 13% drop. Even after accounting for the recent loss, the AU$198k worth of stock purchased by them is now worth AU$227k or in other words, their investment continues to give good returns.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
Vanadium Resources Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by insider Faldi Ismail for AU$142k worth of shares, at about AU$0.10 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.074). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. 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. Faldi Ismail was the only individual insider to buy shares in the last twelve months.
Faldi Ismail purchased 3.06m shares over the year. The average price per share was AU$0.065. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insider Ownership of Vanadium Resources
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Insiders own 37% of Vanadium Resources shares, worth about AU$13m. 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 Vanadium Resources Insiders?
The fact that there have been no Vanadium Resources insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Vanadium Resources and their transactions don't cause us concern. 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. Every company has risks, and we've spotted 4 warning signs for Vanadium Resources (of which 1 is potentially serious!) you should know about.
But note: Vanadium 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.