With Tasman Resources Up 25%, Insider Buyers Count Their Returns

Last week, Tasman Resources Ltd (ASX:TAS) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 25% last week, resulting in a AU$713k increase in the company's market worth, implying a 25% gain on their initial purchase. In other words, the original AU$235.6k purchase is now worth AU$294.5k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Tasman Resources

Tasman Resources Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Executive Chairman Gregory Solomon for AU$123k worth of shares, at about AU$0.004 per share. We do like to see buying, but this purchase was made at well below the current price of AU$0.005. 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 Tasman Resources insiders bought shares during the last year, they didn't sell. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. 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 Tasman Resources Have Bought Stock Recently

Over the last quarter, Tasman Resources insiders have spent a meaningful amount on shares. Overall, two insiders shelled out AU$236k for shares in the company -- and none sold. That shows some optimism about the company's future.

Does Tasman Resources Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Tasman Resources insiders own about AU$2.0m worth of shares (which is 55% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Tasman Resources Insider Transactions Indicate?

The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Tasman Resources insiders are well aligned, and quite possibly think the share price is too low. Nice! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Tasman Resources. Every company has risks, and we've spotted 3 warning signs for Tasman Resources (of which 2 can't be ignored!) you should know about.

Of course Tasman Resources 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.