Lefroy Exploration's Market Cap Up AU$2.4m Following Year Of Insider Stock Buying

Insiders who bought Lefroy Exploration Limited (ASX:LEX) stock in the last 12 months were richly rewarded last week. The company's market value increased by AU$2.4m as a result of the stock's 10.0% gain over the same period. In other words, the original AU$315.5k purchase is now worth AU$495.8k.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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The Last 12 Months Of Insider Transactions At Lefroy Exploration

In the last twelve months, the biggest single purchase by an insider was when Non-Executive Director Michael Macgregor Davies bought AU$200k worth of shares at a price of AU$0.07 per share. Even though the purchase was made at a significantly lower price than the recent price (AU$0.11), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Lefroy Exploration insiders may have bought shares in the last year, but they didn't sell any. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

Check out our latest analysis for Lefroy Exploration

Lefroy Exploration is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. 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 Lefroy Exploration insiders own 15% of the company, worth about AU$4.1m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Lefroy Exploration Tell Us?

It doesn't really mean much that no insider has traded Lefroy Exploration shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Lefroy Exploration and we see no evidence to suggest they are worried about the future. 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 5 warning signs for Lefroy Exploration (3 are a bit unpleasant!) that we believe deserve your full attention.

But note: Lefroy Exploration 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.