OzAurum Resources Insider Stock Sellers Must Be Relieved As Market Cap Falls To AU$12m

Insiders seem to have made the most of their holdings by selling AU$261k worth of OzAurum Resources Limited (ASX:OZM) stock at an average sell price of AU$0.052 during the past year. The company’s market cap plunged by AU$2.2m after price dropped by 16% last week but insiders were able to limit their loss to an extent.

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.

See our latest analysis for OzAurum Resources

The Last 12 Months Of Insider Transactions At OzAurum Resources

The insider, Martin Holland, made the biggest insider sale in the last 12 months. That single transaction was for AU$165k worth of shares at a price of AU$0.061 each. That means that even when the share price was below the current price of AU$0.073, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 39% of Martin Holland's stake. Martin Holland was the only individual insider to sell shares in the last twelve months.

Martin Holland ditched 5.00m shares over the year. The average price per share was AU$0.052. 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!

I will like OzAurum Resources better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Does OzAurum Resources 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. 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 40% of OzAurum Resources shares, worth about AU$4.6m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The OzAurum Resources Insider Transactions Indicate?

It doesn't really mean much that no insider has traded OzAurum Resources shares in the last quarter. Still, the insider transactions at OzAurum Resources in the last 12 months are not very heartening. But we do like the fact that insiders own a fair chunk of the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing OzAurum Resources. To that end, you should learn about the 5 warning signs we've spotted with OzAurum Resources (including 4 which are significant).

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.