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Insiders who bought Green Critical Minerals Limited (ASX:GCM) stock in the last 12 months were richly rewarded last week. The company's market value increased by AU$9.5m as a result of the stock's 36% gain over the same period. In other words, the original AU$162.5k purchase is now worth AU$475.0k.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
View our latest analysis for Green Critical Minerals
The Last 12 Months Of Insider Transactions At Green Critical Minerals
The insider Leon Pretorius made the biggest insider purchase in the last 12 months. That single transaction was for AU$162k worth of shares at a price of AU$0.0065 each. We do like to see buying, but this purchase was made at well below the current price of AU$0.019. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Green Critical Minerals 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.
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. From our data, it seems that Green Critical Minerals insiders own 12% of the company, worth about AU$4.3m. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Whilst better than nothing, we're not overly impressed by these holdings.
What Might The Insider Transactions At Green Critical Minerals Tell Us?
The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Green Critical Minerals insiders are expecting a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Green Critical Minerals. Every company has risks, and we've spotted 5 warning signs for Green Critical Minerals (of which 4 are significant!) you should know about.