Insiders Who Purchased CA$2.57m Of Tantalex Lithium Resources Stock May Not Have Expected 20% Tumble

Insiders who acquired CA$2.57m worth of Tantalex Lithium Resources Corp.'s (CSE:TTX) stock at an average price of CA$0.034 in the past 12 months may be dismayed by the recent 20% price decline. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only CA$1.50m.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Tantalex Lithium Resources

The Last 12 Months Of Insider Transactions At Tantalex Lithium Resources

The Independent Director Simon Collins made the biggest insider purchase in the last 12 months. That single transaction was for CA$684k worth of shares at a price of CA$0.035 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$0.02). 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. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. The only individual insider to buy over the last year was Simon Collins.

Simon Collins bought 74.77m shares over the last 12 months at an average price of CA$0.034. 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!

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.

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. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 15% of Tantalex Lithium Resources shares, worth about CA$3.2m, according to our data. 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!

So What Does This Data Suggest About Tantalex Lithium Resources Insiders?

The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Tantalex Lithium Resources insiders are expecting a bright 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. Be aware that Tantalex Lithium Resources is showing 7 warning signs in our investment analysis, and 6 of those are potentially serious...

Of course Tantalex Lithium Resources may not be the best stock to buy. So you may wish to see this free collection of high quality 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.

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

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.