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Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Jindalee Lithium Limited (ASX:JLL), it sends a favourable message to the company's shareholders.
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 Jindalee Lithium
Jindalee Lithium Insider Transactions Over The Last Year
The Executive Director Lindsay Dudfield made the biggest insider purchase in the last 12 months. That single transaction was for AU$112k worth of shares at a price of AU$1.40 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.58). 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. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
In the last twelve months Jindalee Lithium insiders were buying shares, but not selling. 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!
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 Of Jindalee Lithium
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. Jindalee Lithium insiders own about AU$14m worth of shares. That equates to 39% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Jindalee Lithium Tell Us?
The fact that there have been no Jindalee Lithium insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think Jindalee Lithium insiders are doubting the company, and they do own shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Jindalee Lithium. To that end, you should learn about the 6 warning signs we've spotted with Jindalee Lithium (including 3 which are potentially serious).