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Trade Alert: The Non-Executive Director Of Galan Lithium Limited (ASX:GLN), Christopher Chalwell, Has Just Spent AU$60k Buying 1.6% More Shares

·3 min read

Whilst it may not be a huge deal, we thought it was good to see that the Galan Lithium Limited (ASX:GLN) Non-Executive Director, Christopher Chalwell, recently bought AU$60k worth of stock, for AU$1.19 per share. Although the purchase is not a big one, increasing their shareholding by only 1.6%, it can be interpreted as a good sign.

View our latest analysis for Galan Lithium

The Last 12 Months Of Insider Transactions At Galan Lithium

The Non-Executive Director, Daniel Schuster, made the biggest insider sale in the last 12 months. That single transaction was for AU$82k worth of shares at a price of AU$2.17 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is AU$1.43. So it is hard to draw any strong conclusion from it. The only individual insider seller over the last year was Daniel Schuster.

In the last twelve months insiders purchased 319.31k shares for AU$372k. On the other hand they divested 37.70k shares, for AU$82k. Overall, Galan Lithium insiders were net buyers during the last year. Their average price was about AU$1.16. To my mind it is good that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
insider-trading-volume

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).

Insider Ownership

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 18% of Galan Lithium shares, worth about AU$77m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Galan Lithium Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. 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 Galan Lithium 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. Every company has risks, and we've spotted 3 warning signs for Galan Lithium (of which 2 shouldn't be ignored!) you should know about.

Of course Galan Lithium may not be the best stock to buy. So you may wish to see this free collection of high quality 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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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