Insiders Give Up €52k As Zinnwald Lithium Stock Drops To UK£0.057

The recent price decline of 12% in Zinnwald Lithium Plc's (LON:ZNWD) stock may have disappointed insiders who bought €110.7k worth of shares at an average price of €0.11 in the past 12 months. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only €58.6k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Zinnwald Lithium

Zinnwald Lithium Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by CFO, Secretary & Director Osman Rifaat for UK£71k worth of shares, at about UK£0.11 per share. That means that even when the share price was higher than UK£0.057 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Notably Osman Rifaat was also the biggest seller.

Happily, we note that in the last year insiders paid UK£111k for 1.03m shares. But insiders sold 1.03m shares worth UK£111k. In the last twelve months there was more buying than selling by Zinnwald Lithium insiders. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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 Zinnwald Lithium Boast High 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Zinnwald Lithium insiders own about UK£5.3m worth of shares. That equates to 19% of the company. 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 Do The Zinnwald Lithium Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Zinnwald Lithium shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Zinnwald Lithium and we see no evidence to suggest they are worried about the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Zinnwald Lithium. Every company has risks, and we've spotted 5 warning signs for Zinnwald Lithium (of which 4 are potentially serious!) you should know about.

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 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.