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Insiders who bought US$938.6k worth of Lithium Royalty Corp. (TSE:LIRC) stock in the last year recovered part of their losses as the stock rose by 10% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled US$215k since the time of purchase.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for Lithium Royalty
The Last 12 Months Of Insider Transactions At Lithium Royalty
Over the last year, we can see that the biggest insider purchase was by Co-Founder & Executive Chairman of the Board Blair Levinsky for CA$746k worth of shares, at about CA$8.00 per share. That means that an insider was happy to buy shares at above the current price of CA$6.00. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
In the last twelve months insiders purchased 120.55k shares for CA$939k. But insiders sold 10.75k shares worth CA$62k. In the last twelve months there was more buying than selling by Lithium Royalty insiders. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
Lithium Royalty Insiders Bought Stock Recently
Over the last three months, we've seen a bit of insider buying at Lithium Royalty. In that period insiders spent CA$77k on shares. However, Co-Founder Mark Wellings netted CA$62k for sales. While it's good to see the insider buying, the net amount bought isn't enough for us to gain much confidence from it.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. From looking at our data, insiders own CA$3.4m worth of Lithium Royalty stock, about 1.0% of the company. We consider this fairly low insider ownership.