Insider Sellers Might Regret Selling Industrial Minerals Shares at a Lower Price Than Current Market Value

Industrial Minerals Ltd's (ASX:IND) stock price has dropped 11% in the previous week, but insiders who sold AU$3.1m in stock over the past year have had less luck. Insiders might have been better off holding onto their shares, given that the average selling price of AU$0.95 is still below the current share price.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Industrial Minerals

The Last 12 Months Of Insider Transactions At Industrial Minerals

In the last twelve months, the biggest single sale by an insider was when the insider, Peter Gianni, sold AU$3.1m worth of shares at a price of AU$0.95 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of AU$0.17. So it may not shed much light on insider confidence at current levels. The only individual insider seller over the last year was Peter Gianni.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

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

Insiders At Industrial Minerals Have Bought Stock Recently

There was some insider buying at Industrial Minerals over the last quarter. Non-Executive Chairman Ashley Pattison shelled out AU$23k for shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

Does Industrial Minerals Boast High 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Industrial Minerals insiders own 41% of the company, currently worth about AU$5.4m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Industrial Minerals Insiders?

Our data shows a little insider buying, but no selling, in the last three months. The net investment is not enough to encourage us much. While we gain confidence from high insider ownership of Industrial Minerals, we can't say the same about their transactions in the last year, in the absence of further purchases. 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 instance, we've identified 4 warning signs for Industrial Minerals (3 can't be ignored) you should be aware of.

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.