One African Rainbow Minerals Insider Has Reduced Their Stake

Viewing insider transactions for African Rainbow Minerals Limited's (JSE:ARI ) over the last year, we see that insiders were net sellers. This means that a larger number of shares were sold by insiders in relation to shares purchased.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for African Rainbow Minerals

African Rainbow Minerals Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Independent Non-Executive Director, Jan Steenkamp, sold R3.9m worth of shares at a price of R195 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is R162. So it is hard to draw any strong conclusion from it. Jan Steenkamp was the only individual insider to sell shares in the last twelve months.

The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like African Rainbow Minerals better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insider Ownership Of African Rainbow Minerals

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that African Rainbow Minerals insiders own 0.7% of the company, worth about R221m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The African Rainbow Minerals Insider Transactions Indicate?

It doesn't really mean much that no insider has traded African Rainbow Minerals shares in the last quarter. While we feel good about high insider ownership of African Rainbow Minerals, we can't say the same about the selling of shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example, African Rainbow Minerals has 3 warning signs (and 1 which is significant) we think you should know about.

Of course African Rainbow Minerals 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.