Multiple insiders secured a larger position in Talon Metals Corp. (TSE:TLO) shares over the last 12 months. This is reassuring as this suggests that insiders have increased optimism about the company’s prospects.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for Talon Metals
Talon Metals Insider Transactions Over The Last Year
The Executive Chairman Warren Newfield made the biggest insider purchase in the last 12 months. That single transaction was for CA$4.2m worth of shares at a price of CA$0.69 each. That means that even when the share price was higher than CA$0.49 (the recent price), an insider wanted to purchase shares. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. 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. We note that Warren Newfield was both the biggest buyer and the biggest seller.
Happily, we note that in the last year insiders paid CA$4.5m for 6.57m shares. But insiders sold 3.50m shares worth CA$2.6m. In total, Talon Metals insiders bought more than they sold over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Talon Metals is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Many investors like to check how much of a company is owned by 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$15m worth of shares. That equates to 3.6% 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 Does This Data Suggest About Talon Metals Insiders?
There haven’t been any insider transactions in the last three months — that doesn’t mean much. On a brighter note, the transactions over the last year are encouraging. 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. For instance, we’ve identified 5 warning signs for Talon Metals (3 are potentially serious) you should be aware of.
Of course Talon Metals may not be the best stock to buy. So you may wish to see this free collection of high quality 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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Find out whether Talon 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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