Despite Recent Gains, Transforma Resources Insiders Are Still Down CA$13k

Some of the losses seen by insiders who purchased CA$75.0k worth of Transforma Resources Corporation (CVE:TFM) shares over the past year were recovered after the stock increased by 25% over the past week. The purchase, however, has proven to be a pricey bet, with losses currently totalling CA$13k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Transforma Resources

Transforma Resources Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when CEO, President & Director Carlos Lau bought CA$75k worth of shares at a price of CA$0.03 per share. That means that an insider was happy to buy shares at above the current price of CA$0.025. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. The only individual insider to buy over the last year was Carlos Lau.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Does Transforma Resources Boast High 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. It's great to see that Transforma Resources insiders own 58% of the company, worth about CA$345k. 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 Transforma Resources Insiders?

It doesn't really mean much that no insider has traded Transforma Resources shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, Transforma Resources insiders feel good about the company's future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we've found that Transforma Resources has 6 warning signs (5 shouldn't be ignored!) that deserve your attention before going any further with your analysis.

Of course Transforma 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.