Alderan Resources Insiders Still AU$119k Away From Original Investment Value

Insiders who bought AU$315.1k worth of Alderan Resources Limited (ASX:AL8) stock in the last year recovered part of their losses as the stock rose by 17% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled AU$119k since the time of purchase.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Alderan Resources

Alderan Resources Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Niv Dagan bought AU$215k worth of shares at a price of AU$0.006 per share. That means that even when the share price was higher than AU$0.0035 (the recent price), an insider wanted to purchase shares. 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. 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. Niv Dagan was the only individual insider to buy during the last year.

Niv Dagan purchased 56.12m shares over the year. The average price per share was AU$0.0056. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

Alderan Resources is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

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 18% of Alderan Resources shares, worth about AU$970k. 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 Do The Alderan Resources Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Alderan Resources and we see no evidence to suggest they are worried about the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Alderan Resources. Case in point: We've spotted 5 warning signs for Alderan Resources you should be aware of.

Of course Alderan Resources 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.