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It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Infini Resources Limited's (ASX:I88) case, it's fantastic news for shareholders.
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.
View our latest analysis for Infini Resources
Infini Resources Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by insider Sufian Ahmad for AU$185k worth of shares, at about AU$0.29 per share. Even though the purchase was made at a significantly lower price than the recent price (AU$0.51), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
In the last twelve months Infini Resources insiders were buying shares, but not selling. Their average price was about AU$0.35. To my mind it is good that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. 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 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).
Insiders At Infini Resources Have Bought Stock Recently
It's good to see that Infini Resources insiders have made notable investments in the company's shares. In total, insiders bought AU$105k worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.
Insider Ownership Of Infini 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Infini Resources insiders own 60% of the company, currently worth about AU$20m based on the recent share price. 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 Does This Data Suggest About Infini Resources Insiders?
It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Infini Resources. Nice! While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To that end, you should learn about the 3 warning signs we've spotted with Infini Resources (including 2 which are significant).