Stock Analysis

Don't Ignore The Fact That This Insider Just Sold Some Shares In ioneer Ltd (ASX:INR)

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ASX:INR
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Some ioneer Ltd (ASX:INR) shareholders may be a little concerned to see that the MD & Director, Bernard Rowe, recently sold a substantial AU$754k worth of stock at a price of AU$0.26 per share. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 4.5%.

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The Last 12 Months Of Insider Transactions At ioneer

In fact, the recent sale by Bernard Rowe was the biggest sale of ioneer shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was below the current price of AU$0.28, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 4.5% of Bernard Rowe's stake.

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:INR Insider Trading Volume December 19th 2020

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).

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that ioneer insiders own 15% of the company, worth about AU$71m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About ioneer Insiders?

An insider sold stock recently, but they haven't been buying. Despite some insider buying, the longer term picture doesn't make us feel much more positive. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 5 warning signs for ioneer (2 can't be ignored!) and we strongly recommend you look at them before investing.

But note: ioneer 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, but not derivative transactions.

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