Group 6 Metals Limited (ASX:G6M) insiders made a handsome profit after selling stock presently valued at AU$0.17 apiece for AU$0.26

By
Simply Wall St
Published
January 21, 2022
ASX:G6M
Source: Shutterstock

Even though Group 6 Metals Limited (ASX:G6M) stock gained 14% last week, insiders who sold AU$321k worth of stock over the past year are probably better off. Selling at an average price of AU$0.26, which is higher than the current price might have been the right call as holding on to stock would have meant their investment would be worth less now than it was at the time of sale.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Group 6 Metals

Group 6 Metals Insider Transactions Over The Last Year

The insider, Catherine Morritt, made the biggest insider sale in the last 12 months. That single transaction was for AU$321k worth of shares at a price of AU$0.26 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (AU$0.17). So it is hard to draw any strong conclusion from it. The only individual insider seller over the last year was Catherine Morritt.

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!

insider-trading-volume
ASX:G6M Insider Trading Volume January 21st 2022

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insiders at Group 6 Metals Have Bought Stock Recently

It's good to see that Group 6 Metals insiders have made notable investments in the company's shares. Executive Chairman & CEO Johann Jooste-Jacobs spent AU$97k on stock, and there wasn't any selling. That shows some optimism about the company's future.

Does Group 6 Metals Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Group 6 Metals insiders own about AU$18m worth of shares. That equates to 17% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Group 6 Metals Insiders?

The recent insider purchase is heartening. However, the longer term transactions are not so encouraging. We don't take much heart from transactions by Group 6 Metals insiders over the last year. But they own a reasonable amount of the company, and there was some buying recently. Overall they seem reasonably aligned. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Group 6 Metals. Every company has risks, and we've spotted 4 warning signs for Group 6 Metals (of which 3 are a bit unpleasant!) you should know about.

Of course Group 6 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, but not derivative transactions.

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