TalonX Resources Drops To AU$0.006, Yet Insiders May Have Sold Too Early

Despite the fact that TalonX Resources Limited's (ASX:TXR) value has dropped 14% in the last week insiders who sold AU$193k worth of stock in the past 12 months have had less success. Given that the average selling price of AU$0.012 is still lower than the current share price, insiders would probably have been better off keeping their shares.

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 TalonX Resources

In the last twelve months, the biggest single sale by an insider was when the insider, Jan Forrester, sold AU$193k worth of shares at a price of AU$0.012 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (AU$0.006). So it may not shed much light on insider confidence at current levels. Jan Forrester was the only individual insider to sell over the last year.

Happily, we note that in the last year insiders paid AU$98k for 8.43m shares. But insiders sold 16.16m shares worth AU$193k. You can see a visual depiction of insider transactions (by companies and 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!

See our latest analysis for TalonX Resources

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TalonX Resources Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at TalonX Resources. In total, insider Jan Forrester sold AU$193k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Insiders own 25% of TalonX Resources shares, worth about AU$1.4m. 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 TalonX Resources Insider Transactions Indicate?

An insider sold stock recently, but they haven't been buying. Zooming out, the longer term picture doesn't give us much comfort. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. So we'd only buy after careful consideration. 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 TalonX Resources is showing 6 warning signs in our investment analysis, and 4 of those are a bit concerning...

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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.