Star Minerals Decline Means Insider Profits Down To AU$119k

Insiders who purchased Star Minerals Limited (ASX:SMS) shares in the past 12 months are unlikely to be deeply impacted by the stock's 23% decline over the past week. Even after accounting for the recent loss, the AU$244.5k worth of stock purchased by them is now worth AU$363.2k or in other words, their investment continues to give good returns.

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.

See our latest analysis for Star Minerals

Star Minerals Insider Transactions Over The Last Year

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. We do like to see buying, but this purchase was made at well below the current price of AU$0.046. 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 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 insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

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 Hugh Pilgrim shelled out AU$74k for shares in that time. It's great to see that insiders are only buying, not selling. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

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. 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 35% of the company, worth about AU$1.5m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Star Minerals Tell Us?

It's certainly positive to see the recent insider purchase. 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. Insiders likely see value in Star Minerals shares, given these transactions (along with notable insider ownership of the company). So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 5 warning signs for Star Minerals (of which 4 can't be ignored!) you should know about.

But note: Star Minerals 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.

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

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.