Constellation Resources Insiders May Regret Not Buying More, Market Cap Hits AU$14m

Insiders who bought Constellation Resources Limited (ASX:CR1) stock in the last 12 months were richly rewarded last week. The company's market value increased by AU$1.3m as a result of the stock's 10.0% gain over the same period. Put another way, the original AU$384.2k acquisition is now worth AU$623.3k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Constellation Resources

Constellation Resources Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider Kevin Johnson for AU$164k worth of shares, at about AU$0.16 per share. We do like to see buying, but this purchase was made at well below the current price of AU$0.22. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

In the last twelve months Constellation Resources insiders were buying shares, but not selling. The average buy price was around AU$0.14. 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. 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!

Constellation 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.

Insider Ownership Of Constellation Resources

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 30% of Constellation Resources shares, worth about AU$4.1m. 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 Does This Data Suggest About Constellation Resources Insiders?

It doesn't really mean much that no insider has traded Constellation Resources shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Constellation Resources and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Constellation Resources. Be aware that Constellation Resources is showing 5 warning signs in our investment analysis, and 4 of those shouldn't be ignored...

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.