Sorrento Resources' Market Cap Up CA$1.0m Following Year Of Insider Stock Buying

Insiders who bought Sorrento Resources Ltd. (CSE:SRS) stock in the last 12 months were richly rewarded last week. The company's market value increased by CA$1.0m as a result of the stock's 42% gain over the same period. Put another way, the original CA$547.7k acquisition is now worth CA$923.5k.

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.

Our free stock report includes 4 warning signs investors should be aware of before investing in Sorrento Resources. Read for free now.

The Last 12 Months Of Insider Transactions At Sorrento Resources

Notably, that recent purchase by Eric Sprott is the biggest insider purchase of Sorrento Resources shares that we've seen in the last year. We do like to see buying, but this purchase was made at well below the current price of CA$0.14. 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.

In the last twelve months Sorrento Resources insiders were buying shares, but not selling. 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!

See our latest analysis for Sorrento Resources

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insiders At Sorrento Resources Have Bought Stock Recently

It's good to see that Sorrento Resources insiders have made notable investments in the company's shares. Not only was there no selling that we can see, but they collectively bought CA$488k worth of shares. That shows some optimism about the company's future.

Insider Ownership Of Sorrento Resources

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Sorrento Resources insiders own about CA$1.8m worth of shares (which is 53% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Sorrento Resources Tell Us?

It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Sorrento Resources insiders are well aligned, and quite possibly think the share price is too low. That's what I like to see! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To assist with this, we've discovered 4 warning signs that you should run your eye over to get a better picture of Sorrento Resources.

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.