Yahoo Finance Insiders who purchased this year lose CA$113k as Southstone Minerals Limited (CVE:SML) stock drops to CA$0.025
The recent price decline of 17% in Southstone Minerals Limited's (CVE:SML) stock may have disappointed insiders who bought CA$227k worth of shares at an average price of CA$0.05 in the past 12 months. 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 CA$113k 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, logic dictates you should pay some attention to whether insiders are buying or selling shares.
View our latest analysis for Southstone Minerals
Southstone Minerals Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Interim CFO & Executive Chairman of the Board Terry Tucker for CA$227k worth of shares, at about CA$0.05 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$0.025). Their view may have changed since then, but at least it shows they felt optimistic at the time. 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 when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Terry Tucker was the only individual insider to buy during the last year. We note that Terry Tucker was both the biggest buyer and the biggest seller.
The chart below shows insider transactions (by companies and individuals) over the last year. 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).
Does Southstone Minerals Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Southstone Minerals insiders own about CA$137k worth of shares. That equates to 17% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The Southstone Minerals Insider Transactions Indicate?
There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. Insiders own shares in Southstone Minerals and we see no evidence to suggest they are worried about the 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 Southstone Minerals has 5 warning signs (3 don't sit too well with us!) that deserve your attention before going any further with your analysis.
But note: Southstone Minerals 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, but not derivative transactions.
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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.
