Insiders Sold AU$4.4m Of Venus Metals Stock Possibly Sending Warning Sign

While it’s been a great week for Venus Metals Corporation Limited (ASX:VMC) shareholders after stock gained 15%, they should consider it with a grain of salt. The fact that insiders chose to dispose of AU$4.4m worth of stock in the past 12 months even though prices were relatively low could be indicative of some anticipated weakness.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Venus Metals

The Last 12 Months Of Insider Transactions At Venus Metals

The insider, Christopher Wallin, made the biggest insider sale in the last 12 months. That single transaction was for AU$4.4m worth of shares at a price of AU$0.19 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is AU$0.11. So it may not tell us anything about how insiders feel about the current share price. The only individual insider seller over the last year was Christopher Wallin.

The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

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 14% of Venus Metals shares, worth about AU$2.9m, according to our data. 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.

What Might The Insider Transactions At Venus Metals Tell Us?

It doesn't really mean much that no insider has traded Venus Metals shares in the last quarter. We don't take much encouragement from the transactions by Venus Metals insiders. And usually insiders own more stock in the company, according to our data. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Venus Metals. To that end, you should learn about the 4 warning signs we've spotted with Venus Metals (including 2 which shouldn't be ignored).

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.