Cygnus Metals Up 29%, But Some Insiders Miss Out

Despite a 29% gain in Cygnus Metals Limited's (ASX:CY5) stock price this week, shareholders shouldn't let up. Although prices were relatively low, insiders chose to sell AU$602k worth of stock in the past 12 months. This could be a sign of impending weakness.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Cygnus Metals

The Last 12 Months Of Insider Transactions At Cygnus Metals

In the last twelve months, the biggest single sale by an insider was when the Non-Executive Director, Raymond Shorrocks, sold AU$202k worth of shares at a price of AU$0.13 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of AU$0.063. So it may not tell us anything about how insiders feel about the current share price.

In total, Cygnus Metals insiders sold more than they bought over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

I will like Cygnus Metals better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Does Cygnus Metals 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Cygnus Metals insiders own 27% of the company, worth about AU$4.9m. 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 Does This Data Suggest About Cygnus Metals Insiders?

The fact that there have been no Cygnus Metals insider transactions recently certainly doesn't bother us. We don't take much encouragement from the transactions by Cygnus Metals insiders. But we do like the fact that insiders own a fair chunk of the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Cygnus Metals. For instance, we've identified 5 warning signs for Cygnus Metals (3 are a bit concerning) you should be aware of.

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.