Albright Metals Insider Sellers Vindicated After 13% Drop

Insiders at Albright Metals Ltd (ASX:ABR) sold AU$164k worth of stock at an average price of AU$0.0023 a share over the past year, making the most of their investment. The company’s market cap plunged by AU$743k after price dropped by 13% last week but insiders were able to limit their loss to an extent.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At Albright Metals

The insider, Yonglu Yu, made the biggest insider sale in the last 12 months. That single transaction was for AU$164k worth of shares at a price of AU$0.0023 each. That means that an insider was selling shares at slightly below the current price (AU$0.0035). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was 68% of Yonglu Yu's holding. Yonglu Yu was the only individual insider to sell shares in the last twelve months.

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!

See our latest analysis for Albright Metals

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Insiders At Albright Metals Have Sold Stock Recently

The last quarter saw substantial insider selling of Albright Metals shares. In total, insider Yonglu Yu dumped AU$164k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership Of Albright Metals

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Albright Metals insiders own about AU$1.6m worth of shares. That equates to 30% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Albright Metals Insider Transactions Indicate?

An insider sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that Albright Metals is showing 6 warning signs in our investment analysis, and 4 of those are significant...

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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.