Who sold the shares of Silver Lake Resources Limited (ASX: SLR)?

It is not uncommon to see companies perform well in the years following an insider purchase of shares. Unfortunately, there are also many examples of stock prices plummeting after insiders sell stocks. We will therefore examine whether any insiders have bought or sold shares of Silver Lake Resources Limited (ASX: SLR).

Are Insider Trading Important?

It is quite normal to see company insiders, such as board members, trading company shares from time to time. However, there are rules governing insider trading and certain information is required.

We don’t believe shareholders should just follow insider trading. But in the same way, we would consider it foolish to ignore insider trading altogether. For example, a Columbia University to study found that “insiders are more likely to engage in open market purchases of their own company stocks when the company is about to reveal new deals with customers and suppliers.”

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Insider Trading of Silver Lake Resources in the Past Year

In the past twelve months, the biggest single sale by an insider was when Managing Director and Director Luke Tonkin sold A $ 2.4 million worth of shares at a price of A $ 1.73 per share. So it’s clear that an insider wanted to take money off the table, even below the current price of AU $ 1.79. Generally, we find it disheartening when insiders sell below the current price, as it suggests they were happy with a lower valuation. However, while insider selling can be daunting at times, this is only a weak signal. We note that the biggest single sale was 72% of Luke Tonkin’s stake. Luke Tonkin was the only individual insider to sell shares in the past twelve months.

You can see insider trading (by companies and individuals) over the past year represented in the graph below. If you want to know exactly who sold, for how much and when, just click on the graph below!

ASX Insider Trading Volume: SLR January 1, 2021

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Insider ownership of Silver Lake Resources

Many investors like to check how well a company is owned by 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. According to our data, insiders own AUS $ 2.0 million in shares of Silver Lake Resources, or about 0.1% of the company. We consider this insider ownership to be quite low.

What might insider trading at Silver Lake Resources tell us?

There haven’t been any insider trading in the past three months, that doesn’t mean much. Insider trading at Silver Lake Resources does not encourage us to buy. Note also that, to our knowledge, insider ownership is quite low compared to other companies. In addition to knowing the current insider trades, it is useful to identify the risks facing Silver Lake Resources. Every business has risks, and we have spotted 3 warning signs for Silver Lake Resources (2 of which make us uncomfortable!) to know.

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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.

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