Altona Rare Earths CFO & Director Acquires 31% More Stock

Those following along with Altona Rare Earths Plc (LON:REE) will no doubt be intrigued by the recent purchase of shares by Louise Adrian, CFO & Director of the company, who spent a stonking UK£2.1m on stock at an average price of UK£2.01. Not only is that a big swing, but it increased their holding size by 31%, which is definitely great to see.

See our latest analysis for Altona Rare Earths

Altona Rare Earths Insider Transactions Over The Last Year

In fact, the recent purchase by Louise Adrian was the biggest purchase of Altona Rare Earths shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at above the current price of UK£0.017. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Notably Louise Adrian was also the biggest seller.

In the last twelve months insiders purchased 5.29m shares for UK£2.1m. But they sold 3.31m shares for UK£53k. In total, Altona Rare Earths insiders bought more than they sold over the last year. The average buy price was around UK£0.40. I'd consider this a positive as it suggests insiders see value at around the current price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It appears that Altona Rare Earths insiders own 39% of the company, worth about UK£1.1m. 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 Altona Rare Earths Insider Transactions Indicate?

The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Given that insiders also own a fair bit of Altona Rare Earths 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. To help with this, we've discovered 4 warning signs (3 are potentially serious!) that you ought to be aware of before buying any shares in Altona Rare Earths.

But note: Altona Rare Earths 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.