EV Resources Insiders Recover Some Losses, Which Stand At AU$18k

Insiders who bought AU$137.2k worth of EV Resources Limited (ASX:EVR) stock in the last year have seen some of their losses recouped as the stock gained 17% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled AU$18k since the time of purchase.

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.

View our latest analysis for EV Resources

The Last 12 Months Of Insider Transactions At EV Resources

Over the last year, we can see that the biggest insider purchase was by Executive Director Navinderjeet Singh for AU$107k worth of shares, at about AU$0.016 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.014). Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

Happily, we note that in the last year insiders paid AU$137k for 8.52m shares. But insiders sold 4.24m shares worth AU$106k. In the last twelve months there was more buying than selling by EV Resources insiders. 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!

EV Resources is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does EV Resources 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 18% of EV Resources shares, worth about AU$2.7m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At EV Resources Tell Us?

The fact that there have been no EV Resources insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in EV Resources and their transactions don't cause us concern. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Case in point: We've spotted 5 warning signs for EV Resources you should be aware of, and 3 of them are a bit concerning.

But note: EV Resources 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.