Insider Traders Lose AU$82k As Reward Minerals Drops

The recent 11% drop in Reward Minerals Ltd's (ASX:RWD) stock could come as a blow to insiders who purchased AU$256.4k worth of stock at an average buy price of AU$0.059 over the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth AU$173.9k, which is not what they expected.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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The Last 12 Months Of Insider Transactions At Reward Minerals

In the last twelve months, the biggest single purchase by an insider was when Executive Director Michael Ruane bought AU$198k worth of shares at a price of AU$0.06 per share. That means that an insider was happy to buy shares at above the current price of AU$0.04. 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. In our view, the price an insider pays for shares is very important. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Michael Ruane was the only individual insider to buy during the last year.

Michael Ruane bought a total of 4.35m shares over the year at an average price of AU$0.059. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

Check out our latest analysis for Reward Minerals

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insider Ownership Of Reward Minerals

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. It appears that Reward Minerals insiders own 38% of the company, worth about AU$4.1m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Reward Minerals Insiders?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. That said, the purchases were not large. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think Reward Minerals insiders are doubting the company, and they do own shares. 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. When we did our research, we found 6 warning signs for Reward Minerals (5 are concerning!) that we believe deserve your full attention.

Of course Reward Minerals 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.

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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.