Pleasing Signs As A Number Of Insiders Buy Star Minerals Stock

Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Star Minerals Limited (ASX:SMS), it sends a favourable message to the company's shareholders.

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 Star Minerals

The Last 12 Months Of Insider Transactions At Star Minerals

The insider Leslie Ingraham made the biggest insider purchase in the last 12 months. That single transaction was for AU$132k worth of shares at a price of AU$0.03 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.034. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

While Star Minerals 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. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insiders At Star Minerals Have Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at Star Minerals. insider Leslie Ingraham purchased AU$55k worth of shares in that period. It's good to see the insider buying, as well as the lack of recent sellers. But the amount invested in the last three months isn't enough for us too put much weight on it, as a single factor.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Star Minerals insiders own 37% of the company, worth about AU$1.5m. 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 Do The Star Minerals Insider Transactions Indicate?

It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Given that insiders also own a fair bit of Star Minerals we think they are probably pretty confident of a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Star Minerals. Case in point: We've spotted 4 warning signs for Star Minerals you should be aware of.

Of course Star 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.