Even if it's not a huge purchase, we think it was good to see that Joshua Pitt, the Non-Executive Chairman of Traka Resources Limited (ASX:TKL) recently shelled out AU$55k to buy stock, at AU$0.022 per share. However, it only increased their shares held by 6.6%, and it wasn't a huge purchase by absolute value, either.
The Last 12 Months Of Insider Transactions At Traka Resources
In fact, the recent purchase by Non-Executive Chairman Joshua Pitt was not their only acquisition of Traka Resources shares this year. Earlier in the year, they paid AU$0.02 per share in a AU$127k purchase. So it's clear an insider wanted to buy, at around the current price, which is AU$0.021. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the Traka Resources insiders decided to buy shares at close to current prices.
Traka Resources insiders may have bought shares in the last year, but they didn't sell any. You can see the insider transactions (by companies and 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Does Traka Resources Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 34% of Traka Resources shares, worth about AU$3.7m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Traka Resources Insiders?
It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Given that insiders also own a fair bit of Traka Resources we think they are probably pretty confident of a bright future. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To that end, you should learn about the 5 warning signs we've spotted with Traka Resources (including 4 which are concerning).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.
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. 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.
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