Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Catalyst Metals Limited (ASX:CYL), it sends a favourable message to the company's shareholders.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Catalyst Metals

Catalyst Metals Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Non-Executive Director Robin Campbell Scrimgeour for AU$118k worth of shares, at about AU$1.98 per share. That means that even when the share price was higher than AU$1.95 (the recent price), an insider wanted to purchase shares. 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. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Over the last year, we can see that insiders have bought 170.08k shares worth AU$341k. But insiders sold 31.27k shares worth AU$65k. In total, Catalyst Metals insiders bought more than they sold over the last year. 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! insider-trading-volume

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 freelist of companies. (Hint: insiders have been buying them).

Are Catalyst Metals Insiders Buying Or Selling?

We saw some Catalyst Metals insider buying shares in the last three months. In that period Non-Executive Chairman Stephen Boston spent AU$74k on shares. However, Non-Executive Chairman Stephen Boston netted AU$65k for sales. While it's good to see the insider buying, the net amount bought isn't enough for us to gain much confidence from it.



Insider Ownership

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Catalyst Metals insiders own about AU$28m worth of shares. That equates to 14% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Catalyst Metals Insiders?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. The net investment is not enough to encourage us much. But insiders have shown more of an appetite for the stock, over the last year. Insiders own shares in Catalyst Metals and we see no evidence to suggest they are worried about 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. At Simply Wall St, we've found that Catalyst Metals has 2 warning signs (1 can't be ignored!) that deserve your attention before going any further with your analysis.

Of course Catalyst Metals may not be the best stock to buy. So you may wish to see this freecollection 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, but not derivative transactions.

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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.