Dart Mining's Market Cap Drops To AU$2.1m Leaving Insiders With Losses

Insiders who acquired AU$1.27m worth of Dart Mining NL's (ASX:DTM) stock at an average price of AU$0.012 in the past 12 months may be dismayed by the recent 25% price decline. 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$330.9k which is not ideal.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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Dart Mining Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider J. Mellon for AU$971k worth of shares, at about AU$0.061 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. To us, it's very important to consider the price insiders pay for shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. J. Mellon was the only individual insider to buy during the last year.

J. Mellon bought a total of 110.29m shares over the year at an average price of AU$0.012. 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!

Check out our latest analysis for Dart Mining

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

Does Dart Mining Boast High Insider Ownership?

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. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 27% of Dart Mining shares, worth about AU$560k. 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 Do The Dart Mining Insider Transactions Indicate?

The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. Given that insiders also own a fair bit of Dart Mining we think they are probably pretty confident of a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Dart Mining. While conducting our analysis, we found that Dart Mining has 5 warning signs and it would be unwise to ignore them.

But note: Dart Mining 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.