Selling Lindian Resources Shares at a Lower Price Than Current Market Value May Have Been a Costly Mistake for Insiders

Lindian Resources Limited's (ASX:LIN) value has fallen 11% in the last week, but insiders who sold AU$2.3m worth of stock over the last year have had less success. Insiders might have been better off holding onto their shares, given that the average selling price of AU$0.11 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, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Lindian Resources

Lindian Resources Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Rohan Patnaik, for AU$2.1m worth of shares, at about AU$0.11 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of AU$0.093. So it may not tell us anything about how insiders feel about the current share price. The only individual insider seller over the last year was Rohan Patnaik.

Rohan Patnaik sold a total of 21.57m shares over the year at an average price of AU$0.11. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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Lindian Resources Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at Lindian Resources. Specifically, insider Rohan Patnaik ditched AU$260k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership Of Lindian Resources

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Insiders own 32% of Lindian Resources shares, worth about AU$35m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Lindian Resources Insider Transactions Indicate?

An insider sold stock recently, but they haven't been buying. And our longer term analysis of insider transactions didn't bring confidence, either. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We're in no rush to buy! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Lindian Resources. To help with this, we've discovered 5 warning signs (3 are concerning!) that you ought to be aware of before buying any shares in Lindian Resources.

But note: Lindian Resources 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.