MD & Director of Galan Lithium Picks Up 12% More Stock

Those following along with Galan Lithium Limited (ASX:GLN) will no doubt be intrigued by the recent purchase of shares by Juan Pablo de la Vega, MD & Director of the company, who spent a stonking AU$1m on stock at an average price of AU$0.46. Not only is that a big swing, but it increased their holding size by 12%, which is definitely great to see.

Check out our latest analysis for Galan Lithium

The Last 12 Months Of Insider Transactions At Galan Lithium

Notably, that recent purchase by Juan Pablo de la Vega is the biggest insider purchase of Galan Lithium shares that we've seen in the last year. That means that an insider was happy to buy shares at above the current price of AU$0.23. 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. 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.

In the last twelve months Galan Lithium insiders were buying shares, but not selling. 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!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are 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. A high insider ownership often makes company leadership more mindful of shareholder interests. From our data, it seems that Galan Lithium insiders own 13% of the company, worth about AU$14m. But they may have an indirect interest through a corporate structure that we haven't picked up on. Whilst better than nothing, we're not overly impressed by these holdings.

So What Do The Galan Lithium Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Insiders likely see value in Galan Lithium 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 Galan Lithium. Every company has risks, and we've spotted 6 warning signs for Galan Lithium (of which 3 are a bit concerning!) you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.