Industrial Minerals Insiders Recover Some Losses, Which Stand At AU$56k

Insiders who purchased AU$383.6k worth of Industrial Minerals Ltd (ASX:IND) shares over the past year recouped some of their losses after price gained 14% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled AU$56k since the time of purchase.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Industrial Minerals

Industrial Minerals Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Non-Executive Chairman Ashley Pattison for AU$119k worth of shares, at about AU$0.17 per share. That means that an insider was happy to buy shares at above the current price of AU$0.16. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

Industrial Minerals insiders may have bought shares in the last year, but they didn't sell any. The average buy price was around AU$0.19. These transactions suggest that insiders have considered the current price attractive. 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!

Industrial Minerals is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insiders At Industrial Minerals Have Bought Stock Recently

It's good to see that Industrial Minerals insiders have made notable investments in the company's shares. Overall, three insiders shelled out AU$344k for shares in the company -- and none sold. This makes one think the business has some good points.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Industrial Minerals insiders own 36% of the company, worth about AU$4.6m. 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 Industrial Minerals Tell Us?

It is good to see recent purchasing. 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. When combined with notable insider ownership, these factors suggest Industrial Minerals insiders are well aligned, and that they may think the share price is too low. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example, Industrial Minerals has 4 warning signs (and 2 which are concerning) we think you should know about.

But note: Industrial Minerals 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.