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When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Star Minerals Limited's (ASX:SMS) instance, it's good news for shareholders.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
See our latest analysis for Star Minerals
The Last 12 Months Of Insider Transactions At Star Minerals
In fact, the recent purchase by Leslie Ingraham was the biggest purchase of Star Minerals shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at above the current price of AU$0.029. It's very possible they regret the purchase, but it's more likely they are bullish about the company. 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 Star Minerals insiders were buying shares, but not selling. 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 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.
Insiders At Star Minerals Have Bought Stock Recently
Over the last quarter, Star Minerals insiders have spent a meaningful amount on shares. insider Leslie Ingraham spent AU$150k on stock, and there wasn't any selling. This is a positive in our book as it implies some confidence.
Does Star Minerals Boast High Insider Ownership?
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with 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. Star Minerals insiders own about AU$755k worth of shares. That equates to 28% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Star Minerals Insider Transactions Indicate?
The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. Insiders likely see value in Star Minerals shares, given these transactions (along with notable insider ownership of the company). So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 4 warning signs for Star Minerals you should be aware of, and 3 of them shouldn't be ignored.