MTM Critical Metals Reaches AU$78m Market Cap Benefiting Insider Stock Buying

Last week, MTM Critical Metals Limited (ASX:MTM) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 18% last week, resulting in a AU$12m increase in the company's market worth, implying a 182% gain on their initial purchase. As a result, their original purchase of AU$290.0k worth of stock is now worth AU$818.9k.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for MTM Critical Metals

MTM Critical Metals Insider Transactions Over The Last Year

The Non-Executive Chairman John Hannaford made the biggest insider purchase in the last 12 months. That single transaction was for AU$135k worth of shares at a price of AU$0.08 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.23. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

While MTM Critical Metals insiders bought shares during the last year, they didn't sell. 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!

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).

Are MTM Critical Metals Insiders Buying Or Selling?

We've only seen a tiny insider purchase valued at AU$5.0k, in the last three months. Overall, we don't think these recent trades are particularly informative, one way or the other.

Does MTM Critical 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From our data, it seems that MTM Critical Metals insiders own 11% of the company, worth about AU$8.9m. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Do The MTM Critical Metals Insider Transactions Indicate?

We note a that there has been a bit of insider buying recently (but no selling). Overall the buying isn't worth writing home about. But insiders have shown more of an appetite for the stock, over the last year. We'd like to see bigger individual holdings. However, we don't see anything to make us think MTM Critical Metals insiders are doubting 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. Every company has risks, and we've spotted 4 warning signs for MTM Critical Metals (of which 3 make us uncomfortable!) you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.