While Andean Precious Metals Corp. (CVE:APM) shareholders have enjoyed a good week with stock up 13%, they need remain vigilant. Although prices were relatively low, insiders chose to sell US$10.0m worth of stock in the past 12 months. This could be a sign of impending weakness.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At Andean Precious Metals
The Founder & Executive Chairman, Alberto Morales, made the biggest insider sale in the last 12 months. That single transaction was for CA$10.0m worth of shares at a price of CA$1.66 each. That means that an insider was selling shares at slightly below the current price (CA$1.80). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 7.0% of Alberto Morales's stake. Alberto Morales was the only individual insider to sell shares in the last twelve months.
In the last twelve months insiders purchased 4.15m shares for CA$1.6m. On the other hand they divested 6.00m shares, for CA$10.0m. 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!
I will like Andean Precious Metals better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Andean Precious Metals Insiders Bought Stock Recently
It's good to see that Andean Precious Metals insiders have made notable investments in the company's shares. Specifically, Independent Director Robert Buchan bought CA$895k worth of shares in that time, and we didn't record any sales whatsoever. That shows some optimism about the company's future.
Does Andean Precious Metals Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. It's great to see that Andean Precious Metals insiders own 69% of the company, worth about CA$196m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About Andean Precious Metals Insiders?
It is good to see the recent insider purchase. However, the longer term transactions are not so encouraging. The high levels of insider ownership, and the recent buying by an insider suggests they are well aligned and optimistic. While we like knowing 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. Every company has risks, and we've spotted 2 warning signs for Andean Precious Metals you should know about.
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, but not derivative transactions.
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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.