Waratah Minerals Drops To AU$0.24, Yet Insiders May Have Sold Too Early

Even though Waratah Minerals Limited (ASX:WTM) has fallen by 23% over the past week , insiders who sold AU$730k worth of stock over the past year have had less luck. Insiders might have been better off holding onto their shares, given that the average selling price of AU$0.32 is still below the current share price.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Waratah Minerals

The Last 12 Months Of Insider Transactions At Waratah Minerals

In fact, the recent sale by Timothy Rupert Goyder was the biggest sale of Waratah Minerals shares made by an insider individual in the last twelve months, according to our records. 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$0.24. So it may not shed much light on insider confidence at current levels.

Happily, we note that in the last year insiders paid AU$544k for 10.35m shares. But insiders sold 2.30m shares worth AU$730k. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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Waratah Minerals Insiders Are Selling The Stock

We've seen more insider selling than insider buying at Waratah Minerals recently. We note insider Timothy Rupert Goyder cashed in AU$730k worth of shares. On the flip side, insiders spent AU$240k on purchasing shares. Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the company has been fully valued in recent months.

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. We usually like to see fairly high levels of insider ownership. Our data indicates that Waratah Minerals insiders own about AU$5.8m worth of shares (which is 13% of the company). We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

What Might The Insider Transactions At Waratah Minerals Tell Us?

The insider sales have outweighed the insider buying, at Waratah Minerals, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. Insiders own relatively few shares in the company, and when you consider the sales, we're not particularly excited about the stock. We'd certainly practice some caution before buying! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 4 warning signs for Waratah Minerals (3 are concerning!) and we strongly recommend you look at them before investing.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com