Last week, Xtract Resources Plc (LON:XTR) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 16% last week, resulting in a UK£4.3m increase in the company's market worth. As a result, their original purchase of UK£72k worth of stock is now worth UK£76k.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
The Last 12 Months Of Insider Transactions At Xtract Resources
In the last twelve months, the biggest single purchase by an insider was when Executive Chairman Colin Bird bought UK£72k worth of shares at a price of UK£0.035 per share. That implies that an insider found the current price of UK£0.037 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. In this case we're pleased to report that the insider bought shares at close to current prices. Colin Bird was the only individual insider to buy during the last year.
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!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Does Xtract Resources Boast High Insider Ownership?
Many investors like to check how much of a company is owned by 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. Our data indicates that Xtract Resources insiders own about UK£3.2m worth of shares (which is 10% of the company). Whilst better than nothing, we're not overly impressed by these holdings.
So What Do The Xtract Resources Insider Transactions Indicate?
The fact that there have been no Xtract Resources insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. We'd like to see bigger individual holdings. However, we don't see anything to make us think Xtract Resources insiders are doubting the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For instance, we've identified 4 warning signs for Xtract Resources (1 can't be ignored) you should be aware of.
But note: Xtract Resources 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, but not derivative transactions.
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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.
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