Rox Resources Gains 24%, Insider Trades Reap Benefit

Rox Resources Limited (ASX:RXL) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 24% resulting in a AU$33m addition to the company’s market value. In other words, the original AU$273.9k purchase is now worth AU$528.5k.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Rox Resources

The Last 12 Months Of Insider Transactions At Rox Resources

In the last twelve months, the biggest single purchase by an insider was when Non-Executive Director Nathan Stoitis bought AU$100k worth of shares at a price of AU$0.14 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.28. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

While Rox Resources insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

Rox Resources is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insiders At Rox Resources Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at Rox Resources. Overall, three insiders shelled out AU$210k for shares in the company -- and none sold. This could be interpreted as suggesting a positive outlook.

Insider Ownership

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. Insiders own 5.1% of Rox Resources shares, worth about AU$8.7m, according to our data. However, it's possible that insiders might have an indirect interest through a more complex structure. Whilst better than nothing, we're not overly impressed by these holdings.

What Might The Insider Transactions At Rox Resources Tell Us?

The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Rox Resources stock. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Rox Resources. To that end, you should learn about the 3 warning signs we've spotted with Rox Resources (including 2 which are concerning).

Of course Rox Resources 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.