Insiders Give Up AU$67k As Union Star Metals Stock Drops To AU$0.009
The recent 10.0% drop in Union Star Metals Ltd's (ASX:USM) stock could come as a blow to insiders who purchased AU$146.8k worth of stock at an average buy price of AU$0.017 over the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth AU$79.3k, which is not what they expected.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
Union Star Metals Insider Transactions Over The Last Year
The insider Jason Peterson made the biggest insider purchase in the last 12 months. That single transaction was for AU$100k worth of shares at a price of AU$0.016 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.009). 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. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. The only individual insider to buy over the last year was Jason Peterson. We note that Jason Peterson was both the biggest buyer and the biggest seller.
Jason Peterson bought 8.81m shares over the last 12 months at an average price of AU$0.017. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
See our latest analysis for Union Star 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).
Does Union Star Metals Boast High Insider Ownership?
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 8.1% of Union Star Metals shares, worth about AU$414k, according to our data. But they may have an indirect interest through a corporate structure that we haven't picked up on. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
So What Does This Data Suggest About Union Star Metals Insiders?
Insider sales and purchases have netted out over the last three months, so it's hard to draw any conclusion from recent trading. But insiders have shown more of an appetite for the stock, over the last year. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Union Star Metals stock. 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. While conducting our analysis, we found that Union Star Metals has 5 warning signs and it would be unwise to ignore these.
Of course Union Star 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.