Insiders Re-Evaluate Their US$654.8k Stock Purchase As Ferro-Alloy Resources Falls To UK£27m

Insiders who acquired US$654.8k worth of Ferro-Alloy Resources Limited's (LON:FAR) stock at an average price of US$0.10 in the past 12 months may be dismayed by the recent 10% price decline. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth US$361.5k which is not ideal.

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.

See our latest analysis for Ferro-Alloy Resources

Ferro-Alloy Resources Insider Transactions Over The Last Year

The CEO & Director Nicholas Bridgen made the biggest insider purchase in the last 12 months. That single transaction was for UK£650k worth of shares at a price of UK£0.10 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£0.056). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. 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.

In the last twelve months Ferro-Alloy Resources insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Are Ferro-Alloy Resources Insiders Buying Or Selling?

We saw some Ferro-Alloy Resources insider buying shares in the last three months. Non-Executive Director James Turian bought UK£5.2k worth of shares in that time. We like it when there are only buyers, and no sellers. However, in this case the amount invested recently is quite small.

Does Ferro-Alloy Resources 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. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Ferro-Alloy Resources insiders own 28% of the company, worth about UK£7.6m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Ferro-Alloy Resources Insider Transactions Indicate?

Our data shows a little insider buying, but no selling, in the last three months. The net investment is not enough to encourage us much. But insiders have shown more of an appetite for the stock, over the last year. Overall we don't see anything to make us think Ferro-Alloy Resources insiders are doubting the company, and they do own shares. 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. Every company has risks, and we've spotted 5 warning signs for Ferro-Alloy Resources (of which 3 don't sit too well with us!) 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.