One Alma Metals Insider Raised Stake By 19% In Previous Year

From what we can see, insiders were net buyers in Alma Metals Limited's (ASX:ALM ) during the past 12 months. That is, insiders acquired the stock in greater numbers than they sold it.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Alma Metals

The Last 12 Months Of Insider Transactions At Alma Metals

In fact, the recent purchase by Executive Chairman Alasdair Cooke was not their only acquisition of Alma Metals shares this year. Earlier in the year, they paid AU$0.01 per share in a AU$100k purchase. That means that even when the share price was higher than AU$0.009 (the recent price), an insider wanted to purchase shares. 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. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Alasdair Cooke was the only individual insider to buy during the last year.

Alasdair Cooke purchased 33.68m shares over the year. The average price per share was AU$0.0094. 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!

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

Does Alma Metals 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. Insiders own 18% of Alma Metals shares, worth about AU$1.8m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Alma Metals Tell Us?

The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest Alma Metals insiders are well aligned, and that they may think the share price is too low. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Alma Metals. For example, Alma Metals has 5 warning signs (and 4 which make us uncomfortable) we think you should know about.

Of course Alma 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.