Aurania Resources Executive Chairman Acquires 2.1% More Stock

Investors who take an interest in Aurania Resources Ltd. (CVE:ARU) should definitely note that the Executive Chairman, Keith Barron, recently paid CA$0.45 per share to buy CA$400k worth of the stock. Although the purchase only increased their holding by 2.1%, it is still a solid purchase in our view.

View our latest analysis for Aurania Resources

The Last 12 Months Of Insider Transactions At Aurania Resources

Notably, that recent purchase by Executive Chairman Keith Barron was not the only time they bought Aurania Resources shares this year. Earlier in the year, they paid CA$0.20 per share in a CA$461k purchase. Even though the purchase was made at a significantly lower price than the recent price (CA$0.43), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

While Aurania Resources insiders bought shares during the last year, they didn't sell. They paid about CA$0.27 on average. To my mind it is good that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Aurania Resources is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Does Aurania Resources 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. Aurania Resources insiders own about CA$17m worth of shares (which is 40% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Aurania Resources Tell Us?

It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Aurania Resources insiders are well aligned, and quite possibly think the share price is too low. That's what I like to see! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example, Aurania Resources has 5 warning signs (and 3 which are a bit concerning) we think you should know about.

But note: Aurania Resources 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.

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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.