We have lost count of the number of times insiders have racked up shares in a company that is improving significantly. Unfortunately, there are also many examples of stock prices plummeting after insiders sell stocks. Shareholders might therefore want to know if any insiders bought or sold shares of Lake Superior Resources Limited (ASX: SUP).
What is an insider?
Most investors know that it is okay for business executives, such as directors of the board of directors, to buy and sell company stock. However, there are rules governing insider trading and certain information is required.
We don’t believe shareholders should just follow insider trading. But logic dictates that you pay attention to whether insiders are buying or selling stocks. As Peter Lynch put it, “Insiders can sell their shares for any number of reasons, but they buy them for one only: they think the price will go up.”
Check out our latest analysis for Lake Superior resources
The Last 12 Months of Insider Trading at Superior Lake Resources
In the past year or so, we can see that the biggest insider sale has come from insider Quentin Flannery valued at AU $ 211,000, at around AU $ 0.16 per share. So what is clear is that an insider saw fit to sell around the current price of AU $ 0.16. While insider selling is negative, for us it is even more so if stocks are sold for a lower price. In this case, the big sale took place around the current price, so it’s not too bad (but it’s still not positive).
Fortunately, we note that in the past year, insiders paid AU $ 238,000 for 3.63 million shares. But they sold 2.21 million shares for AU $ 352,000. Over the past year, we’ve seen more insider selling of Superior Lake Resources shares than buying. The sellers received a price of around AU $ 0.16, on average. We do not gain the trust of insiders who sell below the recent share price. But we wouldn’t give too much weight to insider selling. Below you can see a visual representation of insider trading (by businesses and individuals) over the past 12 months. By clicking on the graph below, you can see the exact detail of each insider trade!
If you are like me then you not want to miss it free list of growing companies that insiders are buying.
Insider Ownership of Lake Superior Resources
For an ordinary shareholder, it is worth checking out how many shares are owned by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will have an incentive to build the business for the long term. Superior Lake Resources insiders own around A $ 10 million in shares. This equates to 38% of the business. While this is a high but not exceptional level of insider ownership, it is enough to indicate some alignment between management and small shareholders.
So what does this data suggest about Superior Lake Resources insiders?
There haven’t been any insider trading in the past three months, that doesn’t mean much. Our analysis of Superior Lake Resources insider trading leaves us cautious. But we love that the insiders own a good chunk of the business. So, while it is useful to know what insiders are doing in terms of buying or selling, it is also useful to know the risks that a particular company faces. When we did our research we found 5 warning signs for the resources of Lake Superior (3 should not be ignored!) Which we believe deserve your full attention.
If you would rather consult with another company – one with potentially superior finances – then don’t miss this free list of interesting companies, which have a HIGH return on equity and low leverage.
For the purposes of this article, insiders are those persons who report their transactions to the relevant regulatory body. We currently account for open market transactions and private assignments, but not derivative transactions.
When trading Lake Superior resources or any other investment, use the platform seen by many as the professionals’ gateway to the global market, Interactive brokers. You get the cheapest * trading in stocks, options, futures, forex, bonds and funds from around the world from one integrated account. Promoted
This Simply Wall St article is general in nature. It does not constitute a recommendation to buy or sell any stock and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.
*Interactive Brokers Ranked Least Expensive Broker By StockBrokers.com Online Annual Review 2020
Do you have any feedback on this item? Are you worried about the content? Get in touch with us directly. You can also send an email to the editorial team (at) simplywallst.com.