Yahoo Finance Should You Be Worried About Insider Transactions At ioneer Ltd (ASX:INR)?
We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell ioneer Ltd (ASX:INR), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
We don’t think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
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ioneer Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when Vivienne Jagger sold AU$493k worth of shares at a price of AU$0.45 per share. That is hardly a positive sign, even though it took place above the latest price (AU$0.18). So it is hard to draw any strong conclusion from it.
In total, ioneer insiders sold more than they bought over the last year. They sold for an average price of about AU$0.42. It is certainly not great to see that insiders have sold shares in the company. But we note that the selling, on average, was at well above the recently traded price of AU$0.18. You can see a visual depiction of insider transactions (by 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.
Insiders at ioneer Have Bought Stock Recently
Over the last three months, we’ve seen a bit of insider buying at ioneer. Non-Executive Director Alan John Davies shelled out AU$64k for shares in that time. We like it when there are only buyers, and no sellers. But the amount invested in the last three months isn’t enough for us too put much weight on it, as a single factor.
Insider Ownership
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. ioneer insiders own about AU$56m worth of shares. That equates to 21% of the company. 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 Do The ioneer Insider Transactions Indicate?
It is good to see recent insider purchase. However, the longer term transactions are not so encouraging. While recent transactions indicate confidence in ioneer, insiders don’t own enough of the company to overcome our cautiousness about the longer term transactions. So they seem pretty well aligned, overall. I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow for free .
But note: ioneer 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
