Despite Hitting R0.45, Wesizwe Platinum Insiders Still Sold Too Soon

Despite the fact that Wesizwe Platinum Limited's (JSE:WEZ) value has dropped 12% in the last week insiders who sold R2.3m worth of stock in the past 12 months have had less success. Given that the average selling price of R0.65 is still lower than the current share price, insiders would probably have been better off keeping their shares.

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.

See our latest analysis for Wesizwe Platinum

The Last 12 Months Of Insider Transactions At Wesizwe Platinum

The Independent Non-Executive Director, Lincoln Ngculu, made the biggest insider sale in the last 12 months. That single transaction was for R1.7m worth of shares at a price of R0.76 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (R0.45). So it may not shed much light on insider confidence at current levels. Lincoln Ngculu was the only individual insider to sell over the last year.

Lincoln Ngculu divested 3.56m shares over the last 12 months at an average price of R0.65. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Does Wesizwe Platinum Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our information indicates that Wesizwe Platinum insiders own about R1.0m worth of shares. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We might be missing something but that seems like very low insider ownership.

So What Do The Wesizwe Platinum Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. We don't take much encouragement from the transactions by Wesizwe Platinum insiders. We also note that, as far as we can see, insider ownership is fairly low, compared to other companies. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Every company has risks, and we've spotted 5 warning signs for Wesizwe Platinum (of which 4 shouldn't be ignored!) you should know about.

Of course Wesizwe Platinum 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.

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