Anax Metals' Market Cap Drops To AU$16m Leaving Insiders With Losses

The recent 10% drop in Anax Metals Limited's (ASX:ANX) stock could come as a blow to insiders who purchased AU$1.82m worth of stock at an average buy price of AU$0.045 over 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$1.06m which is not ideal.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Anax Metals

The Last 12 Months Of Insider Transactions At Anax Metals

The insider Charles Arve made the biggest insider purchase in the last 12 months. That single transaction was for AU$1.2m worth of shares at a price of AU$0.053 each. That means that an insider was happy to buy shares at above the current price of AU$0.026. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

While Anax Metals insiders bought shares during the last year, they didn't sell. The average buy price was around AU$0.045. These transactions suggest that insiders have considered the current price attractive. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

Anax Metals is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Does Anax Metals Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Insiders own 28% of Anax Metals shares, worth about AU$4.5m. 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 Does This Data Suggest About Anax Metals Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Anax Metals and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Anax Metals. At Simply Wall St, we've found that Anax Metals has 4 warning signs (1 makes us a bit uncomfortable!) that deserve your attention before going any further with your analysis.

Of course Anax Metals may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.