Metal Hawk Insider Confidence Rewarded, Stock Hits AU$17m Market Cap

Metal Hawk Limited (ASX:MHK) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 78% resulting in a AU$7.0m addition to the company’s market value. Put another way, the original AU$181.9k acquisition is now worth AU$342.1k.

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.

See our latest analysis for Metal Hawk

Metal Hawk Insider Transactions Over The Last Year

In fact, the recent purchase by Timothy Rupert Goyder was the biggest purchase of Metal Hawk shares made by an insider individual in the last twelve months, according to our records. Even though the purchase was made at a significantly lower price than the recent price (AU$0.16), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Metal Hawk insiders may have bought shares in the last year, but they didn't sell any. 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!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Metal Hawk Insiders Bought Stock Recently

Over the last quarter, Metal Hawk insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought AU$126k worth of shares. This is a positive in our book as it implies some confidence.

Does Metal Hawk Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Insiders own 23% of Metal Hawk shares, worth about AU$3.9m. 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 Metal Hawk Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Given that insiders also own a fair bit of Metal Hawk we think they are probably pretty confident of a bright future. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. When we did our research, we found 5 warning signs for Metal Hawk (3 are a bit unpleasant!) that we believe deserve your full attention.

Of course Metal Hawk may not be the best stock to buy. So you may wish to see this free collection of high quality 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.