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Insiders who bought CA$660k worth of Clean Air Metals Inc. (CVE:AIR) stock in the last year recovered part of their losses as the stock rose by 12% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled CA$301k since the time of purchase.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Clean Air Metals Insider Transactions Over The Last Year
The Executive Chairman of Board James Gallagher made the biggest insider purchase in the last 12 months. That single transaction was for CA$108k worth of shares at a price of CA$0.27 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$0.19). It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
While Clean Air Metals insiders bought shares during the last year, they didn't sell. Their average price was about CA$0.35. I'd consider this a positive as it suggests insiders see value at around the current price. 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!
Clean Air Metals is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders at Clean Air Metals Have Bought Stock Recently
Over the last quarter, Clean Air Metals insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought CA$153k worth of shares. This makes one think the business has some good points.
Does Clean Air Metals 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. A high insider ownership often makes company leadership more mindful of shareholder interests. From looking at our data, insiders own CA$1.1m worth of Clean Air Metals stock, about 3.6% of the company. We consider this fairly low insider ownership.
So What Do The Clean Air Metals Insider Transactions Indicate?
It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Clean Air Metals stock. While we like knowing 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. Be aware that Clean Air Metals is showing 7 warning signs in our investment analysis, and 3 of those are a bit unpleasant...
Of course Clean Air Metals 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.
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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