Investors who take an interest in Polymetals Resources Ltd (ASX:POL) should definitely note that the Executive Chairman, David Sproule, recently paid AU$0.75 per share to buy AU$375k worth of the stock. Although the purchase is not a big one, by either a percentage standpoint or absolute value, it can be seen as a good sign.

See our latest analysis for Polymetals Resources

Polymetals Resources Insider Transactions Over The Last Year

Notably, that recent purchase by Executive Chairman David Sproule was not the only time they bought Polymetals Resources shares this year. They previously made an even bigger purchase of AU$1.4m worth of shares at a price of AU$0.28 per share. We do like to see buying, but this purchase was made at well below the current price of AU$0.81. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Polymetals Resources insiders may have bought shares in the last year, but they didn't sell any. The average buy price was around AU$0.32. We don't deny that it is nice to see insiders buying stock in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. 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!

Polymetals Resources 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.

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Polymetals Resources insiders own 51% of the company, worth about AU$80m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Polymetals Resources Insiders?

It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Polymetals Resources. Nice! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Polymetals Resources. For instance, we've identified 4 warning signs for Polymetals Resources (2 are a bit unpleasant) you should be aware of.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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 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.