Insiders who acquired CA$122.5k worth of SPC Nickel Corp.’s (CVE:SPC) stock at an average price of CA$0.14 in the past 12 months may be dismayed by the recent 20% price decline. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth CA$36.0k, which is not great.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
In the last twelve months, the biggest single purchase by an insider was when Independent Director Joseph Alger St-Jean bought CA$111k worth of shares at a price of CA$0.22 per share. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being CA$0.04). It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. To us, it’s very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
SPC Nickel insiders may have bought shares in the last year, but they didn’t sell any. The average buy price was around CA$0.14. These transactions suggest that insiders have considered the current price attractive. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
View our latest analysis for SPC Nickel
SPC Nickel is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Based on our data, SPC Nickel insiders have about 4.5% of the stock, worth approximately CA$668k. We consider this fairly low insider ownership.
The fact that there have been no SPC Nickel insider transactions recently certainly doesn’t bother us. But insiders have shown more of an appetite for the stock, over the last year. The transactions are fine but it’d be more encouraging if SPC Nickel insiders bought more shares in the company. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. When we did our research, we found 5 warning signs for SPC Nickel (4 don’t sit too well with us!) that we believe deserve your full attention.
