AsiaBaseMetals Insider Purchases Yet To Pay Off Regardless Of Recent Strength
Insiders who bought CA$318.7k worth of AsiaBaseMetals Inc. (CVE:ABZ) stock in the last year recovered part of their losses as the stock rose by 18% last week. However, the purchase is proving to be an expensive wager as insiders are yet to get ahead of their losses which currently stand at CA$70k since the time of purchase.
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.
Check out our latest analysis for AsiaBaseMetals
AsiaBaseMetals Insider Transactions Over The Last Year
Notably, that recent sale by Terrylene Penstock is the biggest insider sale of AsiaBaseMetals shares that we've seen in the last year. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is CA$0.10. So it may not shed much light on insider confidence at current levels.
Happily, we note that in the last year insiders paid CA$319k for 2.49m shares. On the other hand they divested 2.20m shares, for CA$286k. In total, AsiaBaseMetals insiders bought more than they sold over the last year. They paid about CA$0.13 on average. I'd consider this a positive as it suggests insiders see value at around the current price. 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!
AsiaBaseMetals is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders At AsiaBaseMetals Have Sold Stock Recently
Over the last three months, we've seen notably more insider selling, than insider buying, at AsiaBaseMetals. We note CFO & Director Terrylene Penstock cashed in CA$286k worth of shares. Meanwhile Founder Rajinder Chowdhry bought CA$102k worth. Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the company has been fully valued in recent months.
Does AsiaBaseMetals Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. AsiaBaseMetals insiders own about CA$3.7m worth of shares (which is 74% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About AsiaBaseMetals Insiders?
The insider sales have outweighed the insider buying, at AsiaBaseMetals, in the last three months. On the other hand, the insider transactions over the last year are encouraging. On top of that, insiders own a significant portion of the company. So the recent selling doesn't worry us. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To that end, you should learn about the 6 warning signs we've spotted with AsiaBaseMetals (including 5 which are a bit unpleasant).
But note: AsiaBaseMetals 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 of direct interests only, but not derivative transactions or indirect interests.
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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.
