Independent Non-Executive Director of Falcon Metals Picks Up 6.0% More Stock

Even if it's not a huge purchase, we think it was good to see that Alexander Dorsch, the Independent Non-Executive Director of Falcon Metals Limited (ASX:FAL) recently shelled out AU$77k to buy stock, at AU$0.38 per share. Although the purchase is not a big one, increasing their shareholding by only 6.0%, it can be interpreted as a good sign.

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Falcon Metals Insider Transactions Over The Last Year

The insider Timothy Rupert Goyder made the biggest insider purchase in the last 12 months. That single transaction was for AU$693k worth of shares at a price of AU$0.57 each. That means that an insider was happy to buy shares at above the current price of AU$0.36. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Notably Timothy Rupert Goyder was also the biggest seller.

Over the last year, we can see that insiders have bought 1.80m shares worth AU$1.0m. On the other hand they divested 250.00k shares, for AU$128k. Overall, Falcon Metals insiders were net buyers during the last year. 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!

See our latest analysis for Falcon Metals

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).

Insider Ownership Of Falcon Metals

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data indicates that Falcon Metals insiders own about AU$8.8m worth of shares (which is 9.2% of the company). Whilst better than nothing, we're not overly impressed by these holdings.

So What Does This Data Suggest About Falcon Metals Insiders?

The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Falcon Metals stock. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Falcon Metals. Every company has risks, and we've spotted 6 warning signs for Falcon Metals (of which 1 is significant!) you should know about.

But note: Falcon Metals may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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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