Yahoo Finance As Solaris Resources Inc. (TSE:SLS) drops to CA$846m market cap, insiders might rethink their US$8.7m stock purchase earlier this year
Insiders who acquired US$8.7m worth of Solaris Resources Inc.'s (TSE:SLS) stock at an average price of US$11.64 in the past 12 months may be dismayed by the recent 14% price decline. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only US$5.6m.
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.
See our latest analysis for Solaris Resources
The Last 12 Months Of Insider Transactions At Solaris Resources
Over the last year, we can see that the biggest insider purchase was by Executive Chairman Richard Warke for CA$5.5m worth of shares, at about CA$11.05 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$7.46). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. 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.
In the last twelve months insiders purchased 744.98k shares for CA$8.7m. But they sold 97.98k shares for CA$1.4m. In the last twelve months there was more buying than selling by Solaris Resources insiders. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Solaris Resources 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.
Solaris Resources Insiders Bought Stock Recently
It's good to see that Solaris Resources insiders have made notable investments in the company's shares. In total, insiders bought CA$283k worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.
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. It's great to see that Solaris Resources insiders own 44% of the company, worth about CA$369m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Solaris Resources Insider Transactions Indicate?
It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Solaris Resources. Looks promising! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Solaris Resources. For instance, we've identified 5 warning signs for Solaris Resources (2 are a bit unpleasant) you should be aware of.
Of course Solaris Resources 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.
