Stellar Resources Reaches AU$33m Market Cap Benefiting Insider Stock Buying

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editorial-team@simplywallst.com (Simply Wall St)

Tue, Feb 18, 2025, 2:44 PM 3 min read

Stellar Resources Limited (ASX:SRZ) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 14%, resulting in a AU$4.2m rise in the company's market capitalisation, translating to a gain of 26% on their initial investment. As a result, the stock they originally bought for AU$227.8k is now worth AU$287.2k.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Stellar Resources

The Last 12 Months Of Insider Transactions At Stellar Resources

In fact, the recent purchase by Simon Taylor was the biggest purchase of Stellar 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$0.016. 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. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the Stellar Resources insiders decided to buy shares at close to current prices.

While Stellar Resources insiders bought shares during the last year, they didn't sell. Their average price was about AU$0.013. To my mind it is good that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. 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!

insider-trading-volume — ASX:SRZ Insider Trading Volume February 18th 2025

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 Stellar Resources Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at Stellar Resources. We can see that MD & CEO Simon Taylor paid AU$103k for shares in the company. No-one sold. This could be interpreted as suggesting a positive outlook.

Insider Ownership Of Stellar Resources

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Based on our data, Stellar Resources insiders have about 4.9% of the stock, worth approximately AU$1.6m. However, it's possible that insiders might have an indirect interest through a more complex structure. We prefer to see high levels of insider ownership.

So What Does This Data Suggest About Stellar Resources Insiders?

The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Stellar Resources stock. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 4 warning signs for Stellar Resources (of which 2 don't sit too well with us!) you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.