Platinum Group Metals Falls To CA$1.68, But Insiders Sold At Lower Price

Platinum Group Metals Ltd.'s (TSE:PTM) stock price has dropped 11% in the previous week, but insiders who sold US$493k in stock over the past year have had less luck. Insiders might have been better off holding onto their shares, given that the average selling price of US$2.36 is still below the current share price.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

We've discovered 3 warning signs about Platinum Group Metals. View them for free.

The Last 12 Months Of Insider Transactions At Platinum Group Metals

The President, Frank Hallam, made the biggest insider sale in the last 12 months. That single transaction was for CA$156k worth of shares at a price of CA$2.60 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is CA$1.68. So it is hard to draw any strong conclusion from it.

All up, insiders sold more shares in Platinum Group Metals than they bought, over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

See our latest analysis for Platinum Group Metals

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insiders At Platinum Group Metals Have Sold Stock Recently

The last quarter saw substantial insider selling of Platinum Group Metals shares. Specifically, insiders ditched CA$73k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership Of Platinum Group Metals

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From what we can see in our data, insiders own only about CA$531k worth of Platinum Group Metals shares. It's always possible we are missing something but from our data, it looks like insider ownership is minimal.

So What Do The Platinum Group Metals Insider Transactions Indicate?

Insiders sold stock recently, but they haven't been buying. Despite some insider buying, the longer term picture doesn't make us feel much more positive. When you consider that most companies have higher levels of insider ownership, we're a little wary. We'd certainly practice some caution before buying! 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. To help with this, we've discovered 3 warning signs (2 are a bit concerning!) that you ought to be aware of before buying any shares in Platinum Group Metals.

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.