AsiaBaseMetals' CA$741k Market Cap Fall Books Insider Losses

The recent 14% drop in AsiaBaseMetals Inc.'s (CVE:ABZ) stock could come as a blow to insiders who purchased CA$380.6k worth of stock at an average buy price of CA$0.12 over the past 12 months. 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$280.8k.

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.

Check out our latest analysis for AsiaBaseMetals

AsiaBaseMetals Insider Transactions Over The Last Year

The CFO & Director, Terrylene Penstock, made the biggest insider sale in the last 12 months. That single transaction was for CA$260k worth of shares at a price of CA$0.16 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is CA$0.09. So it may not tell us anything about how insiders feel about the current share price. Terrylene Penstock was the only individual insider to sell over the last year.

Happily, we note that in the last year insiders paid CA$381k for 3.12m shares. But they sold 2.88m shares for CA$355k. Overall, AsiaBaseMetals insiders were net buyers during the last year. The average buy price was around CA$0.12. I'd consider this a positive as it suggests insiders see value at around the current price. 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!

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.

Have AsiaBaseMetals Insiders Traded Recently?

In the last quarter we saw Founder Rajinder Chowdhry spend CA$70k on shares. That's only a tiny bit more than the sales, worth CA$69k. 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. We usually like to see fairly high levels of insider ownership. AsiaBaseMetals insiders own about CA$3.0m worth of shares (which is 68% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At AsiaBaseMetals Tell Us?

Our data shows a little insider buying, but no selling, in the last three months. That said, the purchases were not large. However, our analysis of transactions over the last year is heartening. It would be great to see more insider buying, but overall it seems like AsiaBaseMetals insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing AsiaBaseMetals. For example - AsiaBaseMetals has 5 warning signs we think you should be aware of.

Of course AsiaBaseMetals 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.

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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.