Insider Buyers At Macro Metals Sitting On AU$7.8m Profit

Insiders who bought Macro Metals Limited (ASX:M4M) stock lover the last 12 months are probably not as affected by last week’s 23% loss. After taking the recent loss into consideration, the AU$1.35m worth of stock they bought is now worth AU$9.19m, indicating that their investment yielded a positive return.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Macro Metals

The Last 12 Months Of Insider Transactions At Macro Metals

The Non-Executive Director Tolga Kumova made the biggest insider purchase in the last 12 months. That single transaction was for AU$324k worth of shares at a price of AU$0.005 each. We do like to see buying, but this purchase was made at well below the current price of AU$0.02. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Macro Metals insiders may have bought shares in the last year, but they didn't sell any. The average buy price was around AU$0.0029. It is certainly positive to see that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Macro Metals 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 Of Macro Metals

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 28% of Macro Metals shares, worth about AU$20m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Macro Metals Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Macro Metals and their transactions don't cause us concern. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example, Macro Metals has 4 warning signs (and 2 which can't be ignored) we think you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.