Insiders who bought CA$4.5m worth of Talon Metals Corp. (TSE:TLO) stock in the last year have seen some of their losses recouped as the stock gained 19% last week. However, total losses seen by insiders are still CA$846k but in since the time of purchase.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
The Last 12 Months Of Insider Transactions At Talon Metals
In the last twelve months, the biggest single purchase by an insider was when Executive Chairman Warren Newfield bought CA$4.2m worth of shares at a price of CA$0.69 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$0.56). 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. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Notably Warren Newfield was also the biggest seller.
Happily, we note that in the last year insiders paid CA$4.5m for 6.57m shares. But they sold 3.50m shares for CA$2.6m. In the last twelve months there was more buying than selling by Talon Metals insiders. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Talon Metals is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Does Talon Metals Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Talon Metals insiders own about CA$17m worth of shares. That equates to 3.9% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Talon Metals Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Talon Metals shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders own shares in Talon Metals and we see no evidence to suggest they are worried about the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 5 warning signs for Talon Metals you should be aware of, and 2 of them are significant.
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, 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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