Bullish Rome Resources Insider Buying Worth CA$10.1m Yet To Pay Off

Insiders who acquired CA$10.1m worth of Rome Resources Ltd.'s (CVE:RMR) stock at an average price of CA$0.25 in the past 12 months may be dismayed by the recent 13% price decline. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth CA$6.78m, which is not great.

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.

Check out our latest analysis for Rome Resources

Rome Resources Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Klaus Eckhof bought CA$2.5m worth of shares at a price of CA$0.25 per share. That means that an insider was happy to buy shares at above the current price of CA$0.17. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels. Notably Klaus Eckhof was also the biggest seller.

Happily, we note that in the last year insiders paid CA$10m for 41.12m shares. But they sold 1.08m shares for CA$242k. In the last twelve months there was more buying than selling by Rome Resources insiders. 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!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Rome Resources insiders own about CA$14m worth of shares (which is 63% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Rome Resources Tell Us?

It doesn't really mean much that no insider has traded Rome Resources shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. It would be great to see more insider buying, but overall it seems like Rome Resources insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that Rome Resources is showing 6 warning signs in our investment analysis, and 5 of those shouldn't be ignored...

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.