Non-Executive Director of Sovereign Metals Ian Middlemas Buys 2.5% More Shares

Potential Sovereign Metals Limited (ASX:SVM) shareholders may wish to note that the Non-Executive Director, Ian Middlemas, recently bought AU$283k worth of stock, paying AU$0.71 for each share. While that's a very decent purchase to our minds, it was proportionally a bit modest, boosting their holding by just 2.5%.

See our latest analysis for Sovereign Metals

Sovereign Metals Insider Transactions Over The Last Year

Notably, that recent purchase by Ian Middlemas is the biggest insider purchase of Sovereign Metals shares that we've seen in the last year. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.69). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Ian Middlemas was the only individual insider to buy during the last year.

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!

Sovereign Metals 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.

Insider Ownership Of Sovereign Metals

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Sovereign Metals insiders own about AU$44m worth of shares. That equates to 11% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Sovereign Metals Tell Us?

The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Insiders likely see value in Sovereign Metals 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. When we did our research, we found 4 warning signs for Sovereign Metals (2 are a bit unpleasant!) that we believe deserve your full attention.

Of course Sovereign Metals 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.