Insiders Enjoy AU$1.1m Return After Buying Argonaut Resources Stock

Argonaut Resources NL (ASX:ARE) insiders who acquired shares over the previous 12 months, can probably afford to ignore the recent 13% decline in the stock price. After accounting for the recent loss, the AU$1.12m worth of shares they purchased is now worth AU$2.20m, suggesting a good return on their investment.

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.

See our latest analysis for Argonaut Resources

The Last 12 Months Of Insider Transactions At Argonaut Resources

The insider Paul Pheby made the biggest insider purchase in the last 12 months. That single transaction was for AU$980k worth of shares at a price of AU$0.05 each. Even though the purchase was made at a significantly lower price than the recent price (AU$0.10), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

In the last twelve months Argonaut Resources insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership Of Argonaut Resources

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Argonaut Resources insiders own about AU$4.6m worth of shares. That equates to 24% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Argonaut Resources Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. Overall we don't see anything to make us think Argonaut Resources insiders are doubting the company, and they do own shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that Argonaut Resources is showing 5 warning signs in our investment analysis, and 3 of those make us uncomfortable...

Of course Argonaut 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.