Insiders Re-Evaluate Their AU$962.7k Stock Purchase As Premier Lithium Falls To AU$4.4m

The recent price decline of 11% in Premier Lithium Limited's (ASX:PLC) stock may have disappointed insiders who bought AU$962.7k worth of shares at an average price of AU$0.22 in the past 12 months. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only AU$107.7k.

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.

Check out our latest analysis for Premier Lithium

Premier Lithium Insider Transactions Over The Last Year

The Non Executive Chairman Nicholas Limb made the biggest insider purchase in the last 12 months. That single transaction was for AU$300k worth of shares at a price of AU$0.25 each. That means that even when the share price was higher than AU$0.025 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

In the last twelve months Premier Lithium insiders were buying shares, but not selling. The average buy price was around AU$0.22. This is nice to see since it implies that insiders might see value around current prices. 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!

Premier Lithium is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership Of Premier Lithium

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. It appears that Premier Lithium insiders own 23% of the company, worth about AU$987k. 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 Does This Data Suggest About Premier Lithium Insiders?

It doesn't really mean much that no insider has traded Premier Lithium shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Premier Lithium and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Premier Lithium. At Simply Wall St, we've found that Premier Lithium has 5 warning signs (4 are concerning!) that deserve your attention before going any further with your analysis.

But note: Premier Lithium 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.