Insiders Give Up AU$398k As Resolution Minerals Stock Drops To AU$0.0025

Insiders who bought AU$555.0k worth of Resolution Minerals Ltd's (ASX:RML) stock at an average buy price of AU$0.0088 over the last year may be disappointed by the recent 17% decrease in the stock. 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 AU$156.8k, which is not great.

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

See our latest analysis for Resolution Minerals

The Last 12 Months Of Insider Transactions At Resolution Minerals

Over the last year, we can see that the biggest insider purchase was by Non-Executive Director Mendel Rogatsky for AU$530k worth of shares, at about AU$0.0092 per share. That means that an insider was happy to buy shares at above the current price of AU$0.0025. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

While Resolution Minerals insiders bought shares during the last year, they didn't sell. 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!

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

Does Resolution Minerals Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Resolution Minerals insiders own about AU$798k worth of shares. That equates to 20% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Resolution Minerals Insiders?

It doesn't really mean much that no insider has traded Resolution Minerals shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders own shares in Resolution Minerals and we see no evidence to suggest they are worried about the future. While we like knowing 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. Be aware that Resolution Minerals is showing 6 warning signs in our investment analysis, and 5 of those shouldn't be ignored...

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.