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Investors who take an interest in Emerald Resources NL (ASX:EMR) should definitely note that the Independent Non-Executive Chairman, Jay Hughes, recently paid AU$3.40 per share to buy AU$510k worth of the stock. Although the purchase only increased their holding by 8.1%, it is still a solid purchase in our view.
Check out our latest analysis for Emerald Resources
The Last 12 Months Of Insider Transactions At Emerald Resources
In fact, the recent purchase by Jay Hughes was the biggest purchase of Emerald Resources 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 around the current price of AU$3.40. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for Emerald Resources share holders is that an insider was buying at near the current price. Jay Hughes was the only individual insider to buy shares in the last twelve months.
You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Emerald Resources 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 Of Emerald Resources
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Emerald Resources insiders own 18% of the company, worth about AU$403m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Emerald Resources Insider Transactions Indicate?
It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest Emerald Resources insiders are well aligned, and quite possibly think the share price is too low. Nice! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Emerald Resources.