Bullish Falcon Metals Insiders Rewarded As Their Investment Rises To AU$2.75m

Last week, Falcon Metals Limited (ASX:FAL) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 10% last week, resulting in a AU$11m increase in the company's market worth, implying a 84% gain on their initial purchase. In other words, the original AU$1.49m purchase is now worth AU$2.75m.

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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Falcon Metals Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Timothy Rupert Goyder, sold AU$1.3m worth of shares at a price of AU$0.94 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is AU$0.53. So it may not shed much light on insider confidence at current levels. Notably Timothy Rupert Goyder was also the biggest buyer, having purchased AU$1.5m worth of shares.

Happily, we note that in the last year insiders paid AU$1.5m for 5.18m shares. But insiders sold 1.52m shares worth AU$1.3m. In total, Falcon Metals insiders bought more than they sold over the last year. The average buy price was around AU$0.29. To my mind it is good that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Check out our latest analysis for Falcon Metals

Falcon 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 Falcon 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 13% of Falcon Metals shares, worth about AU$15m, according to our data. We do generally prefer see higher levels of insider ownership.

So What Does This Data Suggest About Falcon Metals Insiders?

It doesn't really mean much that no insider has traded Falcon Metals shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Insiders own shares in Falcon Metals and we see no evidence to suggest they are worried about the future. 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. When we did our research, we found 3 warning signs for Falcon Metals (1 is concerning!) that we believe deserve your full attention.

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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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.