Arya Resources Ltd. (CVE:RBZ) insiders who acquired shares over the previous 12 months, can probably afford to ignore the recent 11% decline in the stock price. Reason being, despite the recent loss, insiders original purchase value of CA$428.8k is now worth CA$1.04m.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
In the last twelve months, the biggest single purchase by an insider was when Director Andrew Cormier bought CA$130k worth of shares at a price of CA$0.15 per share. We do like to see buying, but this purchase was made at well below the current price of CA$0.31. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
In the last twelve months Arya Resources insiders were buying shares, but not selling. They paid about CA$0.13 on average. We don't deny that it is nice to see insiders buying stock in the company. But we must note that the investments were made at well below today's share price. 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!
See our latest analysis for Arya Resources
Arya Resources is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Over the last three months, we've seen significant insider buying at Arya Resources. Director Andrew Cormier spent CA$77k on stock, and there wasn't any selling. That shows some optimism about the company's future.
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 29% of Arya Resources shares, worth about CA$4.1m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest Arya Resources insiders are well aligned, and that they may think the share price is too low. 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. To assist with this, we've discovered 4 warning signs that you should run your eye over to get a better picture of Arya Resources.
Of course Arya Resources 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.
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