It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Traka Resources Limited (ASX:TKL).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
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The Last 12 Months Of Insider Transactions At Traka Resources
In the last twelve months, the biggest single sale by an insider was when Managing Director Patrick Verbeek sold AU$200k worth of shares at a price of AU$0.05 per share. Although we don’t gain confidence from insider selling, we note that this large sale was at well above current price of AU$0.02. So it is hard to draw any strong conclusion from it. Patrick Verbeek was the only individual insider to sell over the last year. Notably Patrick Verbeek was also the biggest buyer, having purchased AU$10.0k worth of shares.
The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Traka Resources is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Are Traka Resources Insiders Buying Or Selling?
There was some insider buying at Traka Resources over the last quarter. Managing Director Patrick Verbeek bought AU$10.0k worth of shares in that time. We like it when there are only buyers, and no sellers. However, in this case the amount invested recently is quite small.
Insider Ownership of Traka Resources
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Traka Resources insiders own about AU$2.3m worth of shares. That equates to 26% of the company. 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 Traka Resources Tell Us?
Our data shows a little more insider buying than selling in the last three months. But the net investment is not enough to encourage us much. Still, the insider transactions at Traka Resources in the last 12 months are not very heartening. But it’s good to see that insiders own shares in the company. I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow for free .
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.