The fact that multiple Andean Silver Limited (ASX:ASL) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. 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.
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.
The Last 12 Months Of Insider Transactions At Andean Silver
In the last twelve months, the biggest single sale by an insider was when the insider, Stephen Parsons, sold AU$9.5m worth of shares at a price of AU$2.60 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It’s of some comfort that this sale was conducted at a price well above the current share price, which is AU$2.09. So it may not shed much light on insider confidence at current levels. Notably Stephen Parsons was also the biggest buyer, having purchased AU$39k worth of shares.
In total, Andean Silver insiders sold more than they bought over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
See our latest analysis for Andean Silver
I will like Andean Silver better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
Does Andean Silver Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Insiders own 10% of Andean Silver shares, worth about AU$46m. 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 Do The Andean Silver Insider Transactions Indicate?
It doesn’t really mean much that no insider has traded Andean Silver shares in the last quarter. Still, the insider transactions at Andean Silver in the last 12 months are not very heartening. The modest level of insider ownership is, at least, some comfort. So while it’s helpful to know what insiders are doing in terms of buying or selling, it’s also helpful to know the risks that a particular company is facing. For instance, we’ve identified 3 warning signs for Andean Silver (2 can’t be ignored) 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.
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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.