Read This Before Buying Ariana Resources plc (LON:AAU) Shares

It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Ariana Resources plc (LON:AAU), you may well want to know whether insiders have been buying or selling.

What Is Insider Buying?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.

Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

View our latest analysis for Ariana Resources

Ariana Resources Insider Transactions Over The Last Year

The MD & Executive Director, Ahmet Sener, made the biggest insider sale in the last 12 months. That single transaction was for UK£520k worth of shares at a price of UK£0.059 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (UK£0.046). So it may not shed much light on insider confidence at current levels.

In the last twelve months insiders purchased 3.79m shares for UK£191k. But insiders sold 10.84m shares worth UK£606k. In total, Ariana Resources insiders sold more than they bought over the last year. 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!

I will like Ariana Resources better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insiders at Ariana Resources Have Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at Ariana Resources. They bought UK£66k worth in that time. But Executive Chairman & Company Secretary Michael de Villiers sold UK£49k worth. It is good to see that insiders have been buying, but they did not buy very many shares, in the scheme of things.

Does Ariana Resources Boast High Insider Ownership?

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. Our data indicates that Ariana Resources insiders own about UK£5.7m worth of shares (which is 11% of the company). Whilst better than nothing, we're not overly impressed by these holdings.

So What Does This Data Suggest About Ariana Resources Insiders?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. That said, the purchases were not large. Recent sales exacerbate our caution arising from analysis of Ariana Resources insider transactions. We also note that, as far as we can see, insider ownership is fairly low, compared to other companies. 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. At Simply Wall St, we've found that Ariana Resources has 3 warning signs (2 can't be ignored!) that deserve your attention before going any further with your analysis.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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, but not derivative transactions.

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This article by Simply Wall St is general in nature. 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.
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