Insiders Buying Supernova Metals Might Wish They Invested More, Stock Gains 44%

Supernova Metals Corp. (CSE:SUPR) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 44%, resulting in a CA$577k rise in the company's market capitalisation, translating to a gain of 94% on their initial investment. In other words, the original CA$224.3k purchase is now worth CA$435.9k.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Supernova Metals

Supernova Metals Insider Transactions Over The Last Year

CEO & Director Sean McGrath previously made an even bigger purchase of CA$113k worth of shares at a price of CA$0.065 per share. We do like to see buying, but this purchase was made at well below the current price of CA$0.13. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Supernova Metals 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!

Supernova Metals is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Are Supernova Metals Insiders Buying Or Selling?

CEO & Director Sean McGrath bought just CA$1.3k worth of shares in that time. That's not much at all. Looking at the net result, we don't think these recent trades shed much light on how insiders, as a group, are feeling about the company's prospects.

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. I reckon it's a good sign if insiders own a significant number of shares in the company. Supernova Metals insiders own about CA$700k worth of shares (which is 57% 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.

So What Does This Data Suggest About Supernova Metals Insiders?

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. On a brighter note, the transactions over the last year are encouraging. It would be great to see more insider buying, but overall it seems like Supernova Metals insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To that end, you should learn about the 5 warning signs we've spotted with Supernova Metals (including 4 which are significant).

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.