Founders Metals Insiders Selling CA$3.6m In Stock Relieved As Market Cap Slides To CA$398m

Insiders seem to have made the most of their holdings by selling CA$3.6m worth of Founders Metals Inc. (CVE:FDR) stock at an average sell price of CA$2.89 during the past year. The company's market valuation decreased by CA$52m after the stock price dropped 12% over the past week, but insiders were spared from painful losses.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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Founders Metals Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the CEO, President, Colin Padget, for CA$1.1m worth of shares, at about CA$2.90 per share. That means that even when the share price was below the current price of CA$3.61, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 50% of Colin Padget's stake.

Founders Metals insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Check out our latest analysis for Founders Metals

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insider Ownership Of Founders Metals

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 11% of Founders Metals shares, worth about CA$42m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Founders Metals Insiders?

It doesn't really mean much that no insider has traded Founders Metals shares in the last quarter. We don't take much encouragement from the transactions by Founders Metals insiders. But it's good to see that insiders own shares in the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. While conducting our analysis, we found that Founders Metals has 3 warning signs and it would be unwise to ignore these.

But note: Founders Metals 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.