Have Insiders Been Selling Superior Resources Limited (ASX:SPQ) Shares?

We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in Superior Resources Limited (ASX:SPQ).

What Is Insider Buying?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, rules govern insider transactions, and certain disclosures are required.

We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

See our latest analysis for Superior Resources

The Last 12 Months Of Insider Transactions At Superior Resources

In the last twelve months, the biggest single sale by an insider was when the insider, Geoffrey Harris, sold AU$189k worth of shares at a price of AU$0.013 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of AU$0.015. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 36% of Geoffrey Harris's holding. Geoffrey Harris was the only individual insider to sell over the last year. Notably Geoffrey Harris was also the biggest buyer, having purchased AU$182k worth of shares.

Happily, we note that in the last year insiders paid AU$182k for 41.98m shares. But insiders sold 16.63m shares worth AU$189k. 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insiders at Superior Resources Have Sold Stock Recently

The last quarter saw substantial insider selling of Superior Resources shares. In total, insider Geoffrey Harris dumped AU$189k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Does Superior Resources Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 17% of Superior Resources shares, worth about AU$3.0m. 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 Superior Resources Insiders?

An insider sold stock recently, but they haven't been buying. Zooming out, the longer term picture doesn't give us much comfort. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! While we like knowing 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 help with this, we've discovered 5 warning signs (2 are a bit unpleasant!) that you ought to be aware of before buying any shares in Superior Resources.

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, but not derivative transactions.

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This article by Simply Wall St is general in nature. 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.
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