South Pacific Metals Decline Means Insider Profits Down To US$362k

Insiders who purchased South Pacific Metals Corp. (CVE:SPMC) shares in the past 12 months are unlikely to be deeply impacted by the stock's 19% decline over the past week. After taking the recent loss into consideration, the US$517.1k worth of stock they bought is now worth US$879.1k, indicating that their investment yielded a positive return.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for South Pacific Metals

South Pacific Metals Insider Transactions Over The Last Year

Notably, that recent purchase by Adam Peter Clode is the biggest insider purchase of South Pacific Metals shares that we've seen in the last year. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of CA$0.34. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

In the last twelve months South Pacific Metals insiders were buying shares, but not selling. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

South Pacific Metals is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

South Pacific Metals Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at South Pacific Metals. Not only was there no selling that we can see, but they collectively bought CA$362k worth of shares. That shows some optimism about the company's future.

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. South Pacific Metals insiders own about CA$2.5m worth of shares. That equates to 21% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At South Pacific Metals Tell Us?

The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Given that insiders also own a fair bit of South Pacific Metals we think they are probably pretty confident of a bright future. 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 South Pacific Metals has 5 warning signs and it would be unwise to ignore them.

But note: South Pacific 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.