Insider Buying: The Valor Resources Limited (ASX:VAL) Non-Executive Director Just Bought 51% More Shares

Whilst it may not be a huge deal, we thought it was good to see that the Valor Resources Limited (ASX:VAL) Non-Executive Director, Brian McMaster, recently bought AU$100k worth of stock, for AU$0.0019 per share. While that isn't the hugest buy, it actually boosted their shareholding by 51%, which is good to see.

Check out our latest analysis for Valor Resources

Valor Resources Insider Transactions Over The Last Year

Notably, that recent purchase by Non-Executive Director Brian McMaster was not the only time they bought Valor Resources shares this year. They previously made an even bigger purchase of AU$212k worth of shares at a price of AU$0.007 per share. That implies that an insider found the current price of AU$0.007 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for Valor Resources share holders is that insiders were buying at near the current price.

While Valor Resources insiders bought shares during the last year, they didn't sell. Their average price was about AU$0.0036. 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. 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!

Valor 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.

Insider Ownership of Valor Resources

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. 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 16% of Valor Resources shares, worth about AU$3.6m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Valor Resources Insider Transactions Indicate?

It is good to see recent purchasing. 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. When combined with notable insider ownership, these factors suggest Valor Resources insiders are well aligned, and that they may think the share price is too low. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Our analysis shows 5 warning signs for Valor Resources (2 are a bit unpleasant!) and we strongly recommend you look at these before investing.

Of course Valor 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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