Insiders Re-Evaluate Their AU$975.0k Stock Purchase As IRIS Metals Falls To AU$26m

Insiders who acquired AU$975.0k worth of IRIS Metals Limited's (ASX:IR1) stock at an average price of AU$0.12 in the past 12 months may be dismayed by the recent 10.0% price decline. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only AU$719.0k.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

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IRIS Metals Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Independent Non-Executive Director Anthony Collins for AU$500k worth of shares, at about AU$0.085 per share. That means that an insider was happy to buy shares at around the current price of AU$0.09. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. Happily, the IRIS Metals insiders decided to buy shares at close to current prices.

IRIS Metals insiders may have bought shares in the last year, but they didn't sell any. They paid about AU$0.12 on average. I'd consider this a positive as it suggests insiders see value at around the current price. 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!

View our latest analysis for IRIS Metals

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

IRIS Metals Insiders Bought Stock Recently

It's good to see that IRIS Metals insiders have made notable investments in the company's shares. Overall, two insiders shelled out AU$100k for shares in the company -- and none sold. This makes one think the business has some good points.

Does IRIS Metals Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that IRIS Metals insiders own 19% of the company, worth about AU$5.0m. 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 Do The IRIS Metals Insider Transactions Indicate?

The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Insiders likely see value in IRIS Metals shares, given these transactions (along with notable insider ownership of the company). So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 4 warning signs for IRIS Metals (2 shouldn't be ignored!) that we believe deserve your full attention.

But note: IRIS Metals 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.