Insider Traders Lose AU$16k As Vital Metals Drops

Insiders who acquired AU$84.0k worth of Vital Metals Limited's (ASX:VML) stock at an average price of AU$0.10 in the past 12 months may be dismayed by the recent 11% price decline. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only AU$68.0k.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

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The Last 12 Months Of Insider Transactions At Vital Metals

The Interim CEO & Chair Alexius Chan made the biggest insider purchase in the last 12 months. That single transaction was for AU$84k worth of shares at a price of AU$0.10 each. That means that an insider was happy to buy shares at above the current price of AU$0.085. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. The only individual insider to buy over the last year was Alexius Chan.

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!

View our latest analysis for Vital Metals

Vital Metals is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insider Ownership Of Vital Metals

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. From our data, it seems that Vital Metals insiders own 10% of the company, worth about AU$2.2m. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We do generally prefer see higher levels of insider ownership.

So What Does This Data Suggest About Vital Metals Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. The transactions are fine but it'd be more encouraging if Vital Metals insiders bought more shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Vital Metals. For instance, we've identified 3 warning signs for Vital Metals (2 are a bit concerning) you should be aware of.

Of course Vital Metals 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.