Even if it's not a huge purchase, we think it was good to see that Paul Chapman, the Non-Executive Chairman of Dreadnought Resources Limited (ASX:DRE) recently shelled out AU$110k to buy stock, at AU$0.0063 per share. That might not be a big purchase but it only increased their holding by 7.3%, and could be interpreted as a good sign.
The Last 12 Months Of Insider Transactions At Dreadnought Resources
Notably, that recent purchase by Non-Executive Chairman Paul Chapman was not the only time they bought Dreadnought Resources shares this year. They previously made an even bigger purchase of AU$113k worth of shares at a price of AU$0.004 per share. We do like to see buying, but this purchase was made at well below the current price of AU$0.007. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
Over the last year, we can see that insiders have bought 84.44m shares worth AU$334k. On the other hand they divested 15729445 shares, for AU$18k. In the last twelve months there was more buying than selling by Dreadnought Resources insiders. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
Dreadnought Resources is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
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. We usually like to see fairly high levels of insider ownership. Dreadnought Resources insiders own about AU$4.7m worth of shares. That equates to 38% 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.
What Might The Insider Transactions At Dreadnought Resources Tell Us?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss last year, which makes us a little cautious. Insiders likely see value in Dreadnought Resources shares, given these transactions (along with notable insider ownership of the company). Along with insider transactions, I recommend checking if Dreadnought Resources is growing revenue. This free chart of historic revenue and earnings should make that easy.
Of course Dreadnought 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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