Anyone interested in American Lithium Corp. (CVE:LI) should probably be aware that the COO, Interim CEO & Director, Michael Kobler, recently divested CA$367k worth of shares in the company, at an average price of CA$0.24 each. Equally important, that sale actually reduced their holding by a full 89% which hardly makes us feel bullish about the stock.
The Last 12 Months Of Insider Transactions At American Lithium
In fact, the recent sale by Michael Kobler was the biggest sale of American Lithium shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was below the current price of CA$0.27, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it’s only a weak signal. We note that the biggest single sale was 89% of Michael Kobler’s holding.
Michael Kobler divested 1600000 shares over the last 12 months at an average price of CA$0.25. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
I will like American Lithium better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insider Ownership of American Lithium
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. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data suggests American Lithium insiders own 4.1% of the company, worth about CA$863k. We prefer to see high levels of insider ownership.
What Might The Insider Transactions At American Lithium Tell Us?
The insider sales have outweighed the insider buying, at American Lithium, in the last three months. Despite some insider buying, the longer term picture doesn’t make us feel much more positive. When you combine this with the relatively low insider ownership, we are very cautious about the stock. We’d certainly think twice before buying! Along with insider transactions, I recommend checking if American Lithium is growing revenue. This free chart of historic revenue and earnings should make that easy.
Of course American Lithium 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, but not derivative transactions.
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