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Non-Executive Chairman Ian Middlemas Just Bought Shares In Sovereign Metals Limited (ASX:SVM)

Simply Wall St

Whilst it may not be a huge deal, we thought it was good to see that the Sovereign Metals Limited (ASX:SVM) Non-Executive Chairman, Ian Middlemas, recently bought AU$131k worth of stock, for AU$0.091 per share. While we're hesitant to get too excited about a purchase of that size, we do note it increased their holding by a solid 11%.

View our latest analysis for Sovereign Metals

Sovereign Metals Insider Transactions Over The Last Year

Notably, that recent purchase by Non-Executive Chairman Ian Middlemas was not the only time they bought Sovereign Metals shares this year. They previously made an even bigger purchase of AU$325k worth of shares at a price of AU$0.065 per share. We do like to see buying, but this purchase was made at well below the current price of AU$0.10. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Sovereign Metals insiders may have bought shares in the last year, but they didn't sell any. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

ASX:SVM Recent Insider Trading, November 9th 2019

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Does Sovereign Metals Boast High Insider Ownership?

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. Sovereign Metals insiders own about AU$9.2m worth of shares. That equates to 24% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Sovereign Metals Tell Us?

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Insiders likely see value in Sovereign Metals shares, given these transactions (along with notable insider ownership of the company). I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

But note: Sovereign Metals 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.