Insiders who bought UK£65.9k worth of Altona Rare Earths Plc (LON:REE) stock in the last year have seen some of their losses recouped as the stock gained 13% last week. The purchase, however, has proven to be a pricey bet, with losses currently totalling UK£9.1k.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
We've discovered 5 warning signs about Altona Rare Earths. View them for free.Over the last year, we can see that the biggest insider purchase was by CFO & Director Louise Adrian for UK£53k worth of shares, at about UK£0.016 per share. That means that an insider was happy to buy shares at above the current price of UK£0.013. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels. Notably Louise Adrian was also the biggest seller.
Happily, we note that in the last year insiders paid UK£66k for 4.21m shares. On the other hand they divested 3.31m shares, for UK£53k. Overall, Altona Rare Earths insiders were net buyers during the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
View our latest analysis for Altona Rare Earths
Altona Rare Earths is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
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. Altona Rare Earths insiders own 44% of the company, currently worth about UK£988k based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
There haven't been any insider transactions in the last three months -- that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. Judging from their transactions, and high insider ownership, Altona Rare Earths insiders feel good about the company's future. While it's good to be aware of 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. When we did our research, we found 5 warning signs for Altona Rare Earths (4 don't sit too well with us!) that we believe deserve your full attention.
But note: Altona Rare Earths 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 of direct interests only, but not derivative transactions or indirect interests.
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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.