As South Star Battery Metals Corp. (CVE:STS) hits CA$18m market cap, insiders may be dismayed about not purchasing higher quantities
South Star Battery Metals Corp. (CVE:STS) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 42% resulting in a CA$8.3m addition to the company’s market value. As a result, the stock they originally bought for CA$320k is now worth CA$380k.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
View our latest analysis for South Star Battery Metals
South Star Battery Metals Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the insider, Felipe Alves, for CA$305k worth of shares, at about CA$0.25 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of CA$0.18. So it may not shed much light on insider confidence at current levels. Felipe Alves was the only individual insider to sell shares in the last twelve months.
Happily, we note that in the last year insiders paid CA$320k for 2.06m shares. But they sold 1.25m shares for CA$305k. In total, South Star Battery Metals insiders bought more than they sold over the last year. The average buy price was around CA$0.16. To my mind it is good that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
South Star Battery Metals is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that South Star Battery Metals insiders own 15% of the company, worth about CA$2.8m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The South Star Battery Metals Insider Transactions Indicate?
The fact that there have been no South Star Battery Metals insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. Insiders own shares in South Star Battery Metals and we see no evidence to suggest they are worried about the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing South Star Battery Metals. At Simply Wall St, we've found that South Star Battery Metals has 5 warning signs (3 can't be ignored!) that deserve your attention before going any further with your analysis.
But note: South Star Battery 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.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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