Trade Alert: The Non-Executive Chairman Of Empire Resources Limited (ASX:ERL), Michael Ruane, Has Just Spent AU$51k Buying 5.5% More Shares

By
Simply Wall St
Published
May 07, 2022
ASX:ERL
Source: Shutterstock

Even if it's not a huge purchase, we think it was good to see that Michael Ruane, the Non-Executive Chairman of Empire Resources Limited (ASX:ERL) recently shelled out AU$51k to buy stock, at AU$0.0093 per share. However, it only increased their shares held by 5.5%, and it wasn't a huge purchase by absolute value, either.

Check out our latest analysis for Empire Resources

Empire Resources Insider Transactions Over The Last Year

Notably, that recent purchase by Non-Executive Chairman Michael Ruane was not the only time they bought Empire Resources shares this year. They previously made an even bigger purchase of AU$302k worth of shares at a price of AU$0.011 per share. That means that even when the share price was higher than AU$0.009 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Empire Resources insiders may have bought shares in the last year, but they didn't sell any. 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!

insider-trading-volume
ASX:ERL Insider Trading Volume May 7th 2022

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

Insider Ownership of Empire Resources

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. 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 Empire Resources insiders own 19% of the company, worth about AU$1.7m. 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 Empire Resources Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. Given that insiders also own a fair bit of Empire Resources 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 Empire Resources. To that end, you should learn about the 4 warning signs we've spotted with Empire Resources (including 2 which don't sit too well with us).

Of course Empire Resources 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, but not derivative transactions.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.