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Whilst it may not be a huge deal, we thought it was good to see that the Liontown Resources Limited (ASX:LTR) Non-Executive Chairman, Timothy Rupert Goyder, recently bought AU$100k worth of stock, for AU$0.10 per share. Nevertheless, it only increased shareholding by a minuscule percentage, and it wasn't a massive purchase by absolute value, either.
Liontown Resources Insider Transactions Over The Last Year
In fact, the recent purchase by Non-Executive Chairman Timothy Rupert Goyder was not their only acquisition of Liontown Resources shares this year. Earlier in the year, they paid AU$0.12 per share in a AU$1.1m purchase. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.10). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
While Liontown Resources insiders bought shares during the last year, they didn't sell. 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).
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. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Liontown Resources insiders own 24% of the company, worth about AU$47m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Liontown Resources Tell Us?
The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Insiders likely see value in Liontown Resources shares, given these transactions (along with notable insider ownership of the company). 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. For instance, we've identified 6 warning signs for Liontown Resources (3 are potentially serious) you should be aware of.
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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