Independent Non-Executive Chairman of Terra Metals Picks Up 50% More Stock

Even if it's not a huge purchase, we think it was good to see that Ian Middlemas, the Independent Non-Executive Chairman of Terra Metals Limited (ASX:TM1) recently shelled out AU$116k to buy stock, at AU$0.035 per share. That purchase might not be huge but it did increase their holding by 50%.

Check out our latest analysis for Terra Metals

The Last 12 Months Of Insider Transactions At Terra Metals

In fact, the recent purchase by Independent Non-Executive Chairman Ian Middlemas was not their only acquisition of Terra Metals shares this year. Earlier in the year, they paid AU$0.052 per share in a AU$260k purchase. That means that an insider was happy to buy shares at around the current price of AU$0.057. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. In this case we're pleased to report that the insider purchases were made at close to current prices.

In the last twelve months Terra Metals insiders were buying shares, but not selling. They paid about AU$0.042 on average. To my mind it is good that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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

Insider Ownership Of Terra Metals

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Our data indicates that Terra Metals insiders own about AU$1.6m worth of shares (which is 11% of the company). We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We do generally prefer see higher levels of insider ownership.

So What Does This Data Suggest About Terra Metals Insiders?

It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Terra Metals insiders are reasonably well aligned, and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Terra Metals. For instance, we've identified 3 warning signs for Terra Metals (2 are a bit concerning) you should be aware of.

But note: Terra Metals may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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 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.