Investors who take an interest in Largo Resources Ltd. (TSE:LGO) should definitely note that the President, Paulo Misk, recently paid CA$0.86 per share to buy CA$144k worth of the stock. That's a very decent purchase to our minds and it grew their holding by a solid 43%.
Largo Resources Insider Transactions Over The Last Year
In fact, the recent purchase by President Paulo Misk was not their only acquisition of Largo Resources shares this year. Earlier in the year, they paid CA$1.03 per share in a CA$254k purchase. That means that even when the share price was higher than CA$0.83 (the recent price), an insider wanted to purchase shares. 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. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
In the last twelve months insiders purchased 598.70k shares for CA$584k. On the other hand they divested 24754 shares, for CA$25k. In the last twelve months there was more buying than selling by Largo Resources insiders. You can see a visual depiction of insider transactions (by 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!
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 Largo 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Our information indicates that Largo Resources insiders own about CA$1.3m worth of shares. It's always possible we are missing something but from our data, it looks like insider ownership is minimal.
What Might The Insider Transactions At Largo Resources Tell Us?
The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Largo Resources stock. 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 assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Largo Resources.
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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