David Sproule Spends AU$375k On Polymetals Resources Stock

Investors who take an interest in Polymetals Resources Ltd (ASX:POL) should definitely note that the Executive Chairman, David Sproule, recently paid AU$0.75 per share to buy AU$375k worth of the stock. Although the purchase is not a big one, by either a percentage standpoint or absolute value, it can be seen as a good sign.

Check out our latest analysis for Polymetals Resources

The Last 12 Months Of Insider Transactions At Polymetals Resources

Notably, that recent purchase by Executive Chairman David Sproule was not the only time they bought Polymetals Resources shares this year. They previously made an even bigger purchase of AU$1.4m worth of shares at a price of AU$0.28 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.81. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

In the last twelve months Polymetals Resources insiders were buying shares, but not selling. The average buy price was around AU$0.32. We don't deny that it is nice to see insiders buying stock 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 click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Polymetals Resources 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

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. I reckon it's a good sign if insiders own a significant number of shares in the company. Polymetals Resources insiders own about AU$80m worth of shares (which is 51% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Polymetals Resources Insiders?

The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Polymetals Resources. Looks promising! 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. Be aware that Polymetals Resources is showing 4 warning signs in our investment analysis, and 2 of those are a bit concerning...

But note: Polymetals Resources 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.