It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Tyranna Resources Limited (ASX:TYX), you may well want to know whether insiders have been buying or selling.
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 on the market. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
See our latest analysis for Tyranna Resources
The Last 12 Months Of Insider Transactions At Tyranna Resources
Non-Executive Director Joseph Pinto made the biggest insider purchase in the last 12 months. That single transaction was for AU$94k worth of shares at a price of AU$0.016 each. That means that an insider was happy to buy shares at above the current price. 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. We generally consider it a positive if insiders have been buying on market, even above the current price. Notably Joseph Pinto was also the biggest seller, having sold AU$1.8k worth of shares.
In the last twelve months insiders purchased 8.35m shares for AU$134k. But they sold 882.35k for AU$1.8k. In total, Tyranna Resources insiders bought more than they sold over the last year. They paid about AU$0.016 on average. This is nice to see since it implies that insiders might see value around current prices (around AU$0.011). The chart below shows insider transactions 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!
I will like Tyranna Resources better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It’s good to see that Tyranna Resources insiders own 16% of the company, worth about AU$1.2m. While this is strong but not in the top group, when it comes to insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Do The Tyranna Resources Insider Transactions Indicate?
The fact that there have been no Tyranna Resources insider transactions recently certainly doesn’t bother us. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Tyranna Resources and their transactions don’t cause us concern. 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 .
But note: Tyranna Resources 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.
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 editorial-team@simplywallst.com.