Aurania Resources Stock Down 12% But Insiders Still In CA$506k Profit

Insiders who bought Aurania Resources Ltd. (CVE:ARU) stock lover the last 12 months are probably not as affected by last week’s 12% loss. After accounting for the recent loss, the CA$497.2k worth of shares they purchased is now worth CA$1.00m, suggesting a good return on their investment.

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.

Check out our latest analysis for Aurania Resources

Aurania Resources Insider Transactions Over The Last Year

The Executive Chairman Keith Barron made the biggest insider purchase in the last 12 months. That single transaction was for CA$461k worth of shares at a price of CA$0.20 each. We do like to see buying, but this purchase was made at well below the current price of CA$0.41. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Aurania Resources insiders may have bought shares in the last year, but they didn't sell any. 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!

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.

Insiders At Aurania Resources Have Bought Stock Recently

Over the last quarter, Aurania Resources insiders have spent a meaningful amount on shares. Overall, two insiders shelled out CA$481k for shares in the company -- and none sold. That shows some optimism about the company's future.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Aurania Resources insiders own 44% of the company, currently worth about CA$17m based on the recent share price. 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 Aurania Resources Insiders?

It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Aurania Resources. One for the watchlist, at least! 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. To help with this, we've discovered 5 warning signs (2 are a bit concerning!) that you ought to be aware of before buying any shares in Aurania Resources.

Of course Aurania 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.

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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.

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