Insiders who purchased eMetals Limited (ASX:EMT) earlier this year lose an additional AU$16k as the stock sinks to AU$0.009

The recent 10.0% drop in eMetals Limited's (ASX:EMT) stock could come as a blow to insiders who purchased AU$152k worth of stock at an average buy price of AU$0.01 over the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth AU$136k, which is not great.

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 eMetals

The Last 12 Months Of Insider Transactions At eMetals

In fact, the recent purchase by Mathew Walker was the biggest purchase of eMetals shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was higher than AU$0.009 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Mathew Walker was the only individual insider to buy during the last year.

Mathew Walker bought a total of 15.14m shares over the year at an average price of AU$0.01. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

eMetals is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Does eMetals Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 19% of eMetals shares, worth about AU$1.4m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At eMetals Tell Us?

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Insiders likely see value in eMetals shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing eMetals. For example - eMetals has 4 warning signs we think you should be aware of.

But note: eMetals 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, but not derivative transactions.

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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.