Stock Analysis

Positive Signs As Multiple Insiders Buy Supernova Metals Stock

CNSX:SUPR
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Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Supernova Metals Corp. (CSE:SUPR), it sends a favourable message to the company's shareholders.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, 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

In the last twelve months, the biggest single purchase by an insider was when CEO & Director Sean McGrath bought CA$113k worth of shares at a price of CA$0.065 per share. So it's clear an insider wanted to buy, at around the current price, which is CA$0.07. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for Supernova Metals share holders is that insiders were buying at near the current price.

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 click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
CNSX:SUPR Insider Trading Volume February 24th 2024

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Have Supernova Metals Insiders Traded Recently?

Over the last three months, we've seen a bit of insider buying at Supernova Metals. Insiders purchased CA$11k worth of shares in that period. It's good to see the insider buying, as well as the lack of recent sellers. However, in this case the amount invested recently is quite small.

Does Supernova Metals Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Supernova Metals insiders own 50% of the company, worth about CA$508k. 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. The net investment is not enough to encourage us much. However, our analysis of transactions over the last year is heartening. Judging from their transactions, and high insider ownership, Supernova Metals insiders feel good about the company's future. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Case in point: We've spotted 6 warning signs for Supernova Metals you should be aware of, and 5 of them are concerning.

But note: Supernova 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 of direct interests only, but not derivative transactions or indirect interests.

Valuation is complex, but we're helping make it simple.

Find out whether Supernova Metals is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.