Group 6 Metals Limited (ASX:G6M) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 18%, resulting in a AU$124m rise in the company's market capitalisation, translating to a gain of 857% on their initial investment. In other words, the original AU$5.62m purchase is now worth AU$53.8m.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Group 6 Metals Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Non-Executive Director Dale Elphinstone bought AU$2.8m worth of shares at a price of AU$0.35 per share. We do like to see buying, but this purchase was made at well below the current price of AU$3.35. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
Dale Elphinstone purchased 16.07m shares over the year. The average price per share was AU$0.35. 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 Group 6 Metals
Group 6 Metals is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership Of Group 6 Metals
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Group 6 Metals insiders own 46% of the company, worth about AU$384m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The Group 6 Metals Insider Transactions Indicate?
There haven't been any insider transactions in the last three months -- that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. Judging from their transactions, and high insider ownership, Group 6 Metals insiders feel good about the company's future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Group 6 Metals. Case in point: We've spotted 3 warning signs for Group 6 Metals you should be aware of.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.