DY6 Metals Insiders May Regret Not Buying More, Market Cap Hits AU$26m

DY6 Metals Ltd (ASX:DY6) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 12%, resulting in a AU$2.7m rise in the company's market capitalisation, translating to a gain of 565% on their initial investment. In other words, the original AU$137.4k purchase is now worth AU$913.4k.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At DY6 Metals

The Executive Chairman Daniel Smith made the biggest insider purchase in the last 12 months. That single transaction was for AU$75k worth of shares at a price of AU$0.04 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.28. 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.

Daniel Smith bought 3.26m shares over the last 12 months at an average price of AU$0.042. 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!

Check out our latest analysis for DY6 Metals

DY6 Metals 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

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 23% of DY6 Metals shares, worth about AU$6.0m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The DY6 Metals Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in DY6 Metals and we see no evidence to suggest they are worried about the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example, DY6 Metals has 4 warning signs (and 3 which are a bit unpleasant) we think you should know about.

Of course DY6 Metals may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.