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Even if it's not a huge purchase, we think it was good to see that Hugh Warner, the CEO & Chairman of Patriot Lithium Limited (ASX:PAT) recently shelled out AU$100k to buy stock, at AU$0.075 per share. Even though that isn't a massive buy, it did increase their holding by 52%, which is arguably a good sign.
Check out our latest analysis for Patriot Lithium
Patriot Lithium Insider Transactions Over The Last Year
In fact, the recent purchase by Hugh Warner was the biggest purchase of Patriot Lithium shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.052). 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. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
Patriot Lithium insiders may have bought shares in the last year, but they didn't sell any. The average buy price was around AU$0.13. I'd consider this a positive as it suggests insiders see value at around the current price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
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. Insiders own 26% of Patriot Lithium shares, worth about AU$1.6m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Patriot Lithium Tell Us?
The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Given that insiders also own a fair bit of Patriot Lithium we think they are probably pretty confident of a bright future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 4 warning signs for Patriot Lithium (2 make us uncomfortable!) and we strongly recommend you look at these before investing.