Arrow Minerals Stock Down 33% But Insiders Still In AU$1.2m Profit

Insiders who bought Arrow Minerals Limited (ASX:AMD) in the last 12 months may probably not pay attention to the stock's recent 33% drop. Reason being, despite the recent loss, insiders original purchase value of AU$572.9k is now worth AU$1.82m.

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 Arrow Minerals

The Last 12 Months Of Insider Transactions At Arrow Minerals

In fact, the recent purchase by David Flanagan was the biggest purchase of Arrow Minerals shares made by an insider individual in the last twelve months, according to our records. We do like to see buying, but this purchase was made at well below the current price of AU$0.004. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

In the last twelve months Arrow Minerals insiders were buying shares, but not selling. The average buy price was around AU$0.0013. It is certainly positive to see that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. The chart below shows insider transactions (by companies and 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!

Arrow Minerals is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Arrow Minerals Insiders Bought Stock Recently

It's good to see that Arrow Minerals insiders have made notable investments in the company's shares. Overall, three insiders shelled out AU$439k for shares in the company -- and none sold. This makes one think the business has some good points.

Does Arrow Minerals Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. From looking at our data, insiders own AU$819k worth of Arrow Minerals stock, about 3.1% of the company. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. I generally like to see higher levels of ownership.

What Might The Insider Transactions At Arrow Minerals Tell Us?

It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Arrow Minerals stock. 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 Arrow Minerals is showing 5 warning signs in our investment analysis, and 4 of those make us uncomfortable...

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.