Some of the losses seen by insiders who purchased AU$142k worth of Caravel Minerals Limited (ASX:CVV) shares over the past year were recovered after the stock increased by 13% over the past week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled AU$8.9k 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 would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for Caravel Minerals
Caravel Minerals Insider Transactions Over The Last Year
The Executive Director Alasdair Cooke made the biggest insider purchase in the last 12 months. That single transaction was for AU$105k worth of shares at a price of AU$0.24 each. That means that an insider was happy to buy shares at above the current price of AU$0.23. 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. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
While Caravel Minerals insiders bought shares during the last year, they didn't sell. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Caravel Minerals 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.
Insiders At Caravel Minerals Have Bought Stock Recently
Over the last quarter, Caravel Minerals insiders have spent a meaningful amount on shares. Overall, four insiders shelled out AU$142k for shares in the company -- and none sold. This could be interpreted as suggesting a positive outlook.
Insider Ownership Of Caravel Minerals
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Insiders own 13% of Caravel Minerals shares, worth about AU$12m, according to our data. But they may have an indirect interest through a corporate structure that we haven't picked up on. Whilst better than nothing, we're not overly impressed by these holdings.
So What Does This Data Suggest About Caravel Minerals Insiders?
It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Insiders likely see value in Caravel Minerals shares, given these transactions (along with notable insider ownership of the company). While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. When we did our research, we found 5 warning signs for Caravel Minerals (2 are potentially serious!) that we believe deserve your full attention.
But note: Caravel Minerals 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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