Pleasing Signs As A Number Of Insiders Buy Star Minerals Stock

It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Star Minerals Limited's (ASX:SMS) case, it's fantastic news for shareholders.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Star Minerals

Star Minerals Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider Leslie Ingraham for AU$132k worth of shares, at about AU$0.03 per share. That means that an insider was happy to buy shares at around the current price of AU$0.03. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for Star Minerals share holders is that insiders were buying at near the current price.

In the last twelve months Star Minerals insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Star Minerals 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.

Star Minerals Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Star Minerals. Specifically, insider Leslie Ingraham bought AU$150k worth of shares in that time, and we didn't record any sales whatsoever. This could be interpreted as suggesting a positive outlook.

Does Star Minerals Boast High 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. It appears that Star Minerals insiders own 34% of the company, worth about AU$958k. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Star Minerals Tell Us?

The recent insider purchase is heartening. 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. Insiders likely see value in Star Minerals shares, given these transactions (along with notable insider ownership of the company). While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To that end, you should learn about the 4 warning signs we've spotted with Star Minerals (including 3 which don't sit too well with us).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com