Electric Metals (USA)'s Market Cap Drops To CA$24m Leaving Insiders With Losses

The recent 18% drop in Electric Metals (USA) Limited's (CVE:EML) stock could come as a blow to insiders who purchased CA$5.00m worth of stock at an average buy price of CA$0.23 over the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth CA$3.51m, which is not what they expected.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Electric Metals (USA)

Electric Metals (USA) Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Steve Durbin bought CA$3.3m worth of shares at a price of CA$0.23 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$0.17). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

While Electric Metals (USA) insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

Electric Metals (USA) is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Does Electric Metals (USA) Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Electric Metals (USA) insiders own 42% of the company, worth about CA$10m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Electric Metals (USA) Tell Us?

The fact that there have been no Electric Metals (USA) insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. It would be great to see more insider buying, but overall it seems like Electric Metals (USA) 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 Electric Metals (USA). Be aware that Electric Metals (USA) is showing 5 warning signs in our investment analysis, and 3 of those are a bit unpleasant...

But note: Electric Metals (USA) 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.

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

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.