Metals

Insiders who bought Catalyst Metals Limited (ASX:CYL) stock in the last 12 months recover some losses, but still down AU$31k

Insiders who bought AU$136k worth of Catalyst Metals Limited (ASX:CYL) stock in the last year have seen some of their losses recouped as the stock gained 13% last week. The purchase, however, has proven to be a pricey bet, with losses currently totalling AU$31k.

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.

View our latest analysis for Catalyst Metals

The Last 12 Months Of Insider Transactions At Catalyst Metals

Over the last year, we can see that the biggest insider purchase was by Non-Executive Director Robin Campbell Scrimgeour for AU$95k worth of shares, at about AU$2.00 per share. That means that an insider was happy to buy shares at above the current price of AU$1.37. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. To us, it’s very important to consider the price insiders pay for shares. 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.

While Catalyst Metals insiders bought shares during the last year, they didn’t sell. The average buy price was around AU$1.76. This is nice to see since it implies that insiders might see value around current prices. 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!

insider-trading-volume
ASX:CYL Insider Trading Volume January 13th 2023

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Catalyst Metals insiders own 15% of the company, worth about AU$20m. 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 Does This Data Suggest About Catalyst Metals Insiders?

The fact that there have been no Catalyst Metals insider transactions recently certainly doesn’t bother us. However, our analysis of transactions over the last year is heartening. Overall we don’t see anything to make us think Catalyst Metals insiders are doubting the company, and they do own shares. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing Catalyst Metals. To that end, you should learn about the 2 warning signs we’ve spotted with Catalyst Metals (including 1 which doesn’t sit too well with us).

But note: Catalyst Metals 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.

Valuation is complex, but we’re helping make it simple.

Find out whether Catalyst Metals is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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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