How Many Tanga Resources Limited (ASX:TRL) Shares Did Insiders Buy, In The Last Year?

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Tanga Resources Limited (ASX:TRL).

What Is Insider Buying?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, rules govern insider transactions, and certain disclosures are required.

We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

See our latest analysis for Tanga Resources

Tanga Resources Insider Transactions Over The Last Year

In fact, the recent purchase by Andrew Pardey was the biggest purchase of Tanga Resources shares made by an insider individual in the last twelve months, according to our records. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.048. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

While Tanga Resources insiders bought shares during the last year, they didn't sell. 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!

Tanga Resources is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insiders at Tanga Resources Have Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at Tanga Resources. Insiders shelled out AU$65k for shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 17% of Tanga Resources shares, worth about AU$1.5m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Tanga Resources Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. 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 Tanga Resources shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Tanga Resources. When we did our research, we found 6 warning signs for Tanga Resources (5 make us uncomfortable!) that we believe deserve your full attention.

Of course Tanga 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, but not derivative transactions.

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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.
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