Insiders who bought into Astro Resources NL (ASX:ARO) earlier this year might wish they'd invested more as stock gained 33%

By
Simply Wall St
Published
January 19, 2022
ASX:ARO
Source: Shutterstock

Astro Resources NL (ASX:ARO) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 33%, resulting in a AU$6.3m rise in the company's market capitalisation. In other words, the original AU$103k purchase is now worth AU$120k.

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 Astro Resources

Astro Resources Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Non-Executive Chairman Jacob Khouri bought AU$103k worth of shares at a price of AU$0.0052 per share. Even though the purchase was made at a significantly lower price than the recent price (AU$0.006), 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.

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!

insider-trading-volume
ASX:ARO Insider Trading Volume January 19th 2022

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Astro Resources insiders own about AU$8.2m worth of shares. That equates to 35% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Astro Resources Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. Overall we don't see anything to make us think Astro Resources insiders are doubting the company, and they do own shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Astro Resources. At Simply Wall St, we've found that Astro Resources has 5 warning signs (2 shouldn't be ignored!) that deserve your attention before going any further with your analysis.

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, but not derivative transactions.

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