Did Galaxy Resources Limited (ASX:GXY) Insiders Buy Up More Shares?
It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Galaxy Resources Limited (ASX:GXY), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
View our latest analysis for Galaxy Resources
The Last 12 Months Of Insider Transactions At Galaxy Resources
There wasn't any very large single transaction over the last year, but we can still observe some trading.
Over the last year, we can see that insiders have bought 90000 shares worth AU$129k. In the last twelve months Galaxy Resources insiders were buying shares, but not selling. Their average price was about AU$1.43. These transactions suggest that insiders have considered the current price of AU$1.15 attractive. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Galaxy Resources is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Galaxy Resources Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at Galaxy Resources. Overall, two insiders shelled out US$80k for shares in the company -- and none sold. This could be interpreted as suggesting a positive outlook.
Insider Ownership of Galaxy Resources
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data indicates that Galaxy Resources insiders own about AU$13m worth of shares (which is 2.9% of the company). Whilst better than nothing, we're not overly impressed by these holdings.
So What Does This Data Suggest About Galaxy Resources Insiders?
It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. Insiders likely see value in Galaxy Resources shares, given these transactions (along with notable insider ownership of the company). If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
But note: Galaxy Resources 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
