Even if it's not a huge purchase, we think it was good to see that Ian Middlemas, the Independent Non-Executive Chairman of Terra Metals Limited (ASX:TM1) recently shelled out AU$116k to buy stock, at AU$0.035 per share. That purchase might not be huge but it did increase their holding by 50%.

See our latest analysis for Terra Metals

Terra Metals Insider Transactions Over The Last Year

Notably, that recent purchase by Independent Non-Executive Chairman Ian Middlemas was not the only time they bought Terra Metals shares this year. Earlier in the year, they paid AU$0.052 per share in a AU$260k purchase. That means that an insider was happy to buy shares at around the current price of AU$0.055. 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. In this case we're pleased to report that the insider purchases were made at close to current prices.

In the last twelve months Terra Metals insiders were buying shares, but not selling. Their average price was about AU$0.042. It is certainly positive to see that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership Of Terra Metals

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data indicates that Terra Metals insiders own about AU$2.3m worth of shares (which is 14% of the company). But they may have an indirect interest through a corporate structure that we haven't picked up on. We do generally prefer see higher levels of insider ownership.

What Might The Insider Transactions At Terra Metals Tell Us?

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Terra Metals insiders are reasonably well aligned, and optimistic for the future. 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 Terra Metals (2 are potentially serious) you should be aware of.

Of course Terra 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 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.