Insiders Who Sold Sigma Lithium Missed Out On 22% Stock Increase
Last week, Sigma Lithium Corporation's (NASDAQ:SGML) stock jumped 22%, but insiders who sold CA$177k worth of stock in over the past year are likely to be in a better position. Holding on to stock would have meant their investment would be worth less now than it was at the time of sale. Thus selling at an average price of CA$9.31, which is higher than the current price, may have been the best decision.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
Sigma Lithium Insider Transactions Over The Last Year
The insider, Bechara Azar, made the biggest insider sale in the last 12 months. That single transaction was for US$177k worth of shares at a price of US$9.41 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$6.22. So it is hard to draw any strong conclusion from it. The only individual insider seller over the last year was Bechara Azar.
Happily, we note that in the last year insiders paid US$22k for 4.66k shares. But they sold 19.00k shares for US$177k. You can see a visual depiction of insider transactions (by companies and 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!
See our latest analysis for Sigma Lithium
For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.
Sigma Lithium Insiders Bought Stock Recently
We saw some Sigma Lithium insider buying shares in the last three months. Insiders bought US$19k worth of shares in that time. It's good to see the insider buying, as well as the lack of recent 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.
Does Sigma Lithium Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Sigma Lithium insiders own about US$24m worth of shares. That equates to 3.2% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Sigma Lithium Insider Transactions Indicate?
Our data shows a little insider buying, but no selling, in the last three months. Overall the buying isn't worth writing home about. We don't take much encouragement from the transactions by Sigma Lithium insiders. The modest level of insider ownership is, at least, some comfort. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Sigma Lithium. For example, Sigma Lithium has 3 warning signs (and 2 which can't be ignored) we think you should know about.
Of course Sigma Lithium may not be the best stock to buy. So you may wish to see this free collection of high quality 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 of direct interests only, but not derivative transactions or indirect interests.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.