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Last week, Dalaroo Metals Ltd (ASX:DAL) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 11% last week, resulting in a AU$497k increase in the company's market worth, implying a 25% gain on their initial purchase. Put another way, the original AU$286.5k acquisition is now worth AU$358.0k.
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.
See our latest analysis for Dalaroo Metals
Dalaroo Metals Insider Transactions Over The Last Year
The Non-Executive Director Bilal Ahmed made the biggest insider purchase in the last 12 months. That single transaction was for AU$200k worth of shares at a price of AU$0.016 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.02. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
In the last twelve months Dalaroo Metals insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Dalaroo Metals insiders own 52% of the company, currently worth about AU$2.6m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About Dalaroo Metals Insiders?
The fact that there have been no Dalaroo Metals insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. It would be great to see more insider buying, but overall it seems like Dalaroo Metals insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. 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. At Simply Wall St, we found 5 warning signs for Dalaroo Metals that deserve your attention before buying any shares.