It is not uncommon to see companies perform well in the years following an insider purchase of shares. Unfortunately, there are also many examples of a sharp drop in stock prices after insiders sold stocks. We will therefore see if any insiders bought or sold shares of Silver Lake Resources Limited (ASX: SLR).
Are Insider Trading Important?
It is quite normal to see company insiders, such as board members, trading company shares from time to time. However, there are rules governing insider trading and certain disclosures are required.
We don’t believe shareholders should just follow insider trading. But also, we would consider it foolish to ignore insider trading altogether. For example, a Columbia University study found that “insiders are more likely to engage in open market purchases of their own company’s shares when the company is about to reveal new deals.” with customers and suppliers ”.
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Silver Lake Resources insider trading in the past year
In the past twelve months, the largest single sale by an insider was when Managing Director and Director Luke Tonkin sold A $ 2.4 million of shares at a price of A $ 1.73 per action. So it’s clear that an insider wanted to take money off the table, even below the current price of AU $ 1.79. Generally, we find it disheartening when insiders sell below the current price, as this suggests they were happy with a lower valuation. However, while insider selling can be daunting at times, this is only a weak signal. Note that the biggest individual sale was 72% of Luke Tonkin’s stake. Luke Tonkin has been the only individual insider to sell shares in the past twelve months.
You can see insider trading (by companies and individuals) over the past year illustrated in the table below. If you want to know exactly who sold, for how much and when, just click on the graph below!
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Insider Ownership of Silver Lake Resources
Many investors like to check how well a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will have an incentive to build the business for the long term. According to our data, insiders hold AUS $ 2.0 million in shares of Silver Lake Resources, or about 0.1% of the company. We consider this insider ownership to be quite weak.
What might insider trading at Silver Lake Resources tell us?
There haven’t been any insider trades in the past three months – that doesn’t mean much. Insider trading at Silver Lake Resources does not encourage us to buy. We also note that, as far as we can see, insider ownership is quite low compared to other companies. In addition to knowing the current insider trading, it is beneficial to identify the risks facing Silver Lake Resources. Every business has risks, and we’ve spotted 3 warning signs for Silver Lake Resources (2 of which make us uncomfortable!) you should know.
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For the purposes of this article, insiders are the people who report their transactions to the relevant regulatory body. We currently record open market transactions and private assignments, but not derivative transactions.
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