Insider Purchases Worth AU$882.9k See Losses As Critical Resources Market Value Drops To AU$7.4m

The recent 25% drop in Critical Resources Limited's (ASX:CRR) stock could come as a blow to insiders who purchased AU$882.9k worth of stock at an average buy price of AU$0.01 over the past 12 months. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth AU$260.8k which is not ideal.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Our free stock report includes 5 warning signs investors should be aware of before investing in Critical Resources. Read for free now.

Critical Resources Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider David Pevcic bought AU$777k worth of shares at a price of AU$0.012 per share. That means that even when the share price was higher than AU$0.003 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Notably David Pevcic was also the biggest seller.

Over the last year, we can see that insiders have bought 86.93m shares worth AU$883k. On the other hand they divested 8.33m shares, for AU$50k. Overall, Critical Resources insiders were net buyers during the last year. They paid about AU$0.01 on average. I'd consider this a positive as it suggests insiders see value at around the current 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!

Check out our latest analysis for Critical Resources

Critical 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.

Critical Resources Insiders Bought Stock Recently

We saw some Critical Resources insider buying shares in the last three months. insider Robert Martin bought AU$50k worth of shares in that time. It's great to see that insiders are only buying, not selling. But the amount invested in the last three months isn't enough for us too put much weight on it, as a single factor.

Insider Ownership Of Critical 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. Insiders own 39% of Critical Resources shares, worth about AU$2.9m. 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 Do The Critical Resources Insider Transactions Indicate?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. Overall the buying isn't worth writing home about. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Critical 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 Critical Resources. To assist with this, we've discovered 5 warning signs that you should run your eye over to get a better picture of Critical Resources.

But note: Critical Resources may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.