Yahoo Finance Orange Minerals NL (ASX:OMX) insiders placed bullish bets worth AU$780k in the last 12 months
It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Orange Minerals NL's (ASX:OMX) case, it's fantastic news for shareholders.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
View our latest analysis for Orange Minerals
Orange Minerals Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when insider Brian Rodan bought AU$549k worth of shares at a price of AU$0.20 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.07). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Orange Minerals insiders may have bought shares in the last year, but they didn't sell any. Their average price was about AU$0.11. These transactions suggest that insiders have considered the current price attractive. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Orange Minerals is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Orange Minerals Insiders Bought Stock Recently
We saw some Orange Minerals insider buying shares in the last three months. Independent Non-Executive Chairman John Smyth shelled out AU$66k for shares in that time. We like it when there are only buyers, and no sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.
Does Orange Minerals Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Orange Minerals insiders own about AU$1.0m 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 Orange Minerals Insider Transactions Indicate?
It's certainly positive to see the recent insider purchase. 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 Orange Minerals we think they are probably pretty confident of a bright future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 4 warning signs for Orange Minerals (of which 2 are concerning!) you should know about.
Of course Orange 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, 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.
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