Asara Resources Gains 27%, Insider Trades Reap Benefit

Asara Resources Limited (ASX:AS1) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 27%, resulting in a AU$22m rise in the company's market capitalisation, translating to a gain of 164% on their initial investment. As a result, their original purchase of AU$548.6k worth of stock is now worth AU$1.45m.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At Asara Resources

In the last twelve months, the biggest single purchase by an insider was when insider Ernest Albers bought AU$549k worth of shares at a price of AU$0.029 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.076. 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.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

See our latest analysis for Asara Resources

Asara Resources is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Does Asara Resources Boast High Insider Ownership?

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. From our data, it seems that Asara Resources insiders own 12% of the company, worth about AU$13m. However, it's possible that insiders might have an indirect interest through a more complex structure. We do generally prefer see higher levels of insider ownership.

So What Do The Asara Resources Insider Transactions Indicate?

The fact that there have been no Asara Resources insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Asara Resources and their transactions don't cause us concern. While it's good to be aware of 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. For example, Asara Resources has 3 warning signs (and 2 which make us uncomfortable) we think you should know about.

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.