The Non-Executive Chairman of Traka Resources Limited (ASX:TKL), Joshua Pitt, Just Bought 6.6% More Shares

Even if it's not a huge purchase, we think it was good to see that Joshua Pitt, the Non-Executive Chairman of Traka Resources Limited (ASX:TKL) recently shelled out AU$55k to buy stock, at AU$0.022 per share. Although the purchase is not a big one, increasing their shareholding by only 6.6%, it can be interpreted as a good sign.

See our latest analysis for Traka Resources

The Last 12 Months Of Insider Transactions At Traka Resources

In fact, the recent purchase by Non-Executive Chairman Joshua Pitt was not their only acquisition of Traka Resources shares this year. They previously made an even bigger purchase of AU$127k worth of shares at a price of AU$0.02 per share. That means that an insider was happy to buy shares at around the current price of AU$0.021. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. 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. In this case we're pleased to report that the insider purchases were made at close to current prices.

Traka Resources insiders may have bought shares in the last year, but they didn't sell any. 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!

Traka Resources is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Does Traka Resources Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 34% of Traka Resources shares, worth about AU$3.7m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Traka Resources Insiders?

The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. 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 Traka Resources 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 Traka Resources (of which 4 are significant!) you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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, but not derivative transactions.

If you’re looking to trade Traka Resources, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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