We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Arizona Silver Exploration Inc. (CVE:AZS), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
Arizona Silver Exploration Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Director Brady Stiles bought CA$815k worth of shares at a price of CA$0.15 per share. So it's clear an insider wanted to buy, at around the current price, which is CA$0.15. Of course they may have changed their mind. But this suggests they are optimistic. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for Arizona Silver Exploration share holders is that insiders were buying at near the current price.
In the last twelve months Arizona Silver Exploration insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by 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!
Arizona Silver Exploration is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Arizona Silver Exploration Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at Arizona Silver Exploration. Specifically, Director Brady Stiles bought CA$815k worth of shares in that time, and we didn't record any sales whatsoever. That shows some optimism about the company's future.
Does Arizona Silver Exploration Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 30% of Arizona Silver Exploration shares, worth about CA$2.3m. 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 Arizona Silver Exploration Insider Transactions Indicate?
It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest Arizona Silver Exploration insiders are well aligned, and that they may think the share price is too low. 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. Our analysis shows 4 warning signs for Arizona Silver Exploration (2 are significant!) and we strongly recommend you look at them before investing.
But note: Arizona Silver Exploration 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.
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This article by Simply Wall St is general in nature. 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. Thank you for reading.