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Who Has Been Buying Aurania Resources Ltd. (CVE:ARU) Shares?

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Aurania Resources Ltd. (CVE:ARU), you may well want to know whether insiders have been buying or selling.

What Is Insider Buying?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.

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We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

See our latest analysis for Aurania Resources

The Last 12 Months Of Insider Transactions At Aurania Resources

The Executive Chairman & CEO Keith Barron made the biggest insider purchase in the last 12 months. That single transaction was for CA$1.1m worth of shares at a price of CA$2.70 each. That means that an insider was happy to buy shares at around the current price of CA$3.35. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the Aurania Resources insiders decided to buy shares at close to current prices.

Over the last year, we can see that insiders have bought 1.03m shares worth CA$2.8m. On the other hand they divested 22642 shares, for CA$76k. In the last twelve months there was more buying than selling by Aurania Resources insiders. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

TSXV:ARU Insider Trading Volume July 10th 2020
TSXV:ARU Insider Trading Volume July 10th 2020

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 Aurania Resources Insiders Buying Or Selling?

In the last three months company Lead Independent Director Alfred Lenarciak divested CA$2.1k worth of stock. That is not a lot. Looking at the net result, we don't think this recent trading sheds much light on how insiders, as a group, are feeling about the company's prospects.

Insider Ownership of Aurania Resources

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Aurania Resources insiders own 49% of the company, worth about CA$68m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Aurania Resources Tell Us?

We did not see any insider buying in the last three months, but we did see selling. But given the selling was modest, we're not worried. However, our analysis of transactions over the last year is heartening. Judging from their transactions, and high insider ownership, Aurania Resources insiders feel good about the company's 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. At Simply Wall St, we've found that Aurania Resources has 5 warning signs (2 make us uncomfortable!) that deserve your attention before going any further with your analysis.

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, but not derivative transactions.

This article by Simply Wall St is general in nature. 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.