Insiders Rewarded With AU$1.4m Addition To Investment As Warriedar Resources Stock Hits AU$115m

Warriedar Resources Limited (ASX:WA8) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 14%, resulting in a AU$14m rise in the company's market capitalisation, translating to a gain of 118% on their initial investment. As a result, their original purchase of AU$1.17m worth of stock is now worth AU$2.55m.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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Warriedar Resources Insider Transactions Over The Last Year

The insider William Pirie made the biggest insider purchase in the last 12 months. That single transaction was for AU$912k worth of shares at a price of AU$0.059 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.12. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

Warriedar Resources insiders may have bought shares in the last year, but they didn't sell any. 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!

Check out our latest analysis for Warriedar Resources

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Warriedar Resources Insiders Bought Stock Recently

It's good to see that Warriedar Resources insiders have made notable investments in the company's shares. insider William Pirie spent AU$912k on stock, and there wasn't any selling. This could be interpreted as suggesting a positive outlook.

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From our data, it seems that Warriedar Resources insiders own 12% of the company, worth about AU$14m. 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 Warriedar Resources Tell Us?

It's certainly positive to see the recent insider purchase. 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. Given that insiders also own a fair bit of Warriedar Resources we think they are probably pretty confident of a bright future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example, Warriedar Resources has 6 warning signs (and 4 which make us uncomfortable) we think you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 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.