Have Insiders Been Selling International Battery Metals Ltd. (CSE:IBAT) Shares?

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we'll take a look at whether insiders have been buying or selling shares in International Battery Metals Ltd. (CSE:IBAT).

Do Insider Transactions Matter?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. 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 logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

View our latest analysis for International Battery Metals

International Battery Metals Insider Transactions Over The Last Year

In fact, the recent sale by Logan Anderson was the biggest sale of International Battery Metals shares made by an insider individual in the last twelve months, according to our records. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (CA$0.71). So it is hard to draw any strong conclusion from it.

Logan Anderson divested 70.00k shares over the last 12 months at an average price of CA$0.86. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insiders at International Battery Metals Have Sold Stock Recently

The last three months saw some International Battery Metals insider selling. CA$60k worth of shares were sold by CFO & Director Logan Anderson. But CA$46k was spent on buying, too, (as we mentioned above) . While it's not great to see insider selling, the net amount sold isn't enough for us to want to read anything into it.

Insider Ownership

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. Based on our data, International Battery Metals insiders have about 1.7% of the stock, worth approximately CA$1.5m. However, it's possible that insiders might have an indirect interest through a more complex structure. We consider this fairly low insider ownership.

So What Do The International Battery Metals Insider Transactions Indicate?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. Overall the buying isn't worth writing home about. Recent sales exacerbate our caution arising from analysis of International Battery Metals insider transactions. We also note that, as far as we can see, insider ownership is fairly low, compared to other companies. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that International Battery Metals is showing 4 warning signs in our investment analysis, and 2 of those are a bit concerning...

But note: International Battery Metals 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.

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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