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The recent price decline of 17% in Impact Minerals Limited's (ASX:IPT) stock may have disappointed insiders who bought AU$460.2k worth of shares at an average price of AU$0.014 in the past 12 months. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth AU$162.2k which is not ideal.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At Impact Minerals
In the last twelve months, the biggest single purchase by an insider was when insider Susanne Bunnenberg bought AU$460k worth of shares at a price of AU$0.014 per share. That means that even when the share price was higher than AU$0.005 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Susanne Bunnenberg was the only individual insider to buy during the last year.
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!
View our latest analysis for Impact Minerals
Impact Minerals is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Insider Ownership Of Impact Minerals
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Impact Minerals insiders own 19% of the company, worth about AU$3.4m. 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 Impact Minerals Insider Transactions Indicate?
The fact that there have been no Impact Minerals insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. Insiders own shares in Impact Minerals and we see no evidence to suggest they are worried about 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. Every company has risks, and we've spotted 5 warning signs for Impact Minerals (of which 2 are a bit concerning!) you should know about.