Aurania Resources' Recent Gains Improve Losses On Insider Purchases Worth CA$1.71m

Insiders who bought CA$1.71m worth of Aurania Resources Ltd. (CVE:ARU) stock in the last year recovered part of their losses as the stock rose by 32% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled CA$449k since the time of purchase.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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The Last 12 Months Of Insider Transactions At Aurania Resources

Notably, that recent purchase by Keith Barron is the biggest insider purchase of Aurania Resources shares that we've seen in the last year. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of CA$0.14. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Aurania Resources insiders may have bought shares in the last year, but they didn't sell any. Their average price was about CA$0.20. I'd consider this a positive as it suggests insiders see value at around the current price. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

View our latest analysis for Aurania Resources

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Aurania Resources Insiders Bought Stock Recently

It's good to see that Aurania Resources insiders have made notable investments in the company's shares. Specifically, Executive Chairman Keith Barron bought CA$689k worth of shares in that time, and we didn't record any sales whatsoever. This could be interpreted as suggesting a positive outlook.

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Aurania Resources insiders own 44% of the company, currently worth about CA$8.1m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Aurania Resources Tell Us?

It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest Aurania Resources insiders are well aligned, and quite possibly think the share price is too low. That's what I like to see! 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 example, Aurania Resources has 5 warning signs (and 3 which are significant) we think you should know about.

Of course Aurania Resources 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 of direct interests only, but not derivative transactions or indirect interests.

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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.