It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Jindalee Lithium Limited's (ASX:JLL) case, it's fantastic news for shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for Jindalee Lithium
Jindalee Lithium Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the insider, Mark Scott, sold AU$316k worth of shares at a price of AU$0.75 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is AU$0.23. So it is hard to draw any strong conclusion from it. The only individual insider seller over the last year was Mark Scott.
Happily, we note that in the last year insiders paid AU$388k for 466.11k shares. On the other hand they divested 420.00k shares, for AU$316k. Overall, Jindalee Lithium insiders were net buyers during the last year. Their average price was about AU$0.83. These transactions suggest that insiders have considered the current price attractive. 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!
Jindalee Lithium is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders At Jindalee Lithium Have Bought Stock Recently
We saw some Jindalee Lithium insider buying shares in the last three months. Insiders shelled out AU$63k for shares in that time. We like it when there are only buyers, and no sellers. However, in this case the amount invested recently is quite small.
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. Jindalee Lithium insiders own about AU$4.0m worth of shares. That equates to 25% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Jindalee Lithium Insider Transactions Indicate?
The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. Insiders likely see value in Jindalee Lithium shares, given these transactions (along with notable insider ownership of the company). 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. Be aware that Jindalee Lithium is showing 5 warning signs in our investment analysis, and 2 of those shouldn't be ignored...