In the last year, many Andean Precious Metals Corp. (TSE:APM) insiders sold a substantial stake in the company which may have sparked shareholders’ attention. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.
Although we don’t think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
Andean Precious Metals Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Founder, Alberto Morales, sold CA$96m worth of shares at a price of CA$10.50 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (CA$5.57). So it may not shed much light on insider confidence at current levels.
Over the last year, we can see that insiders have bought 25.82k shares worth CA$207k. But insiders sold 9.97m shares worth CA$102m. In total, Andean Precious Metals insiders sold more than they bought over the last year. The sellers received a price of around US$10.22, on average. It is certainly not great to see that insiders have sold shares in the company. But we note that the selling, on average, was at well above the recently traded price of CA$5.57. 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!
View our latest analysis for Andean Precious Metals
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).
Andean Precious Metals Insiders Are Selling The Stock
We’ve seen more insider selling than insider buying at Andean Precious Metals recently. In that time, Lead Independent Director Grant Angwin dumped CA$173k worth of shares. On the other hand we note Chief Financial Officer Juan Sandoval bought CA$67k worth of shares. We don’t view these transactions as a positive sign.
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’s great to see that Andean Precious Metals insiders own 56% of the company, worth about CA$492m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About Andean Precious Metals Insiders?
The insider sales have outweighed the insider buying, at Andean Precious Metals, in the last three months. Zooming out, the longer term picture doesn’t give us much comfort. On the plus side, Andean Precious Metals makes money, and is growing profits. The company boasts high insider ownership, but we’re a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing Andean Precious Metals. For instance, we’ve identified 3 warning signs for Andean Precious Metals (2 make us uncomfortable) you should be aware of.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 of direct interests only, but not derivative transactions or indirect interests.
New: Manage All Your Stock Portfolios in One Place
We’ve created the ultimate portfolio companion for stock investors, and it’s free.
• Connect an unlimited number of Portfolios and see your total in one currency
• Be alerted to new Warning Signs or Risks via email or mobile
• Track the Fair Value of your stocks
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.