The recent drop in Lotus Resources Limited’s (ASX:LOT) stock value has resulted in losses for insiders who purchased a significant amount of stock. Insider purchases totaling AU$17.2m were made over the past 12 months, with an average buy price of AU$1.42. However, due to the decrease in market value, their original investment is now worth only AU$3.98m.
While investment decisions should not solely rely on insider activities, it is important to consider whether insiders are buying or selling shares. The largest insider purchase in the last 12 months was made by MD, CEO & Director Keith Bowes, who bought AU$17m worth of shares at a price of AU$1.50 each. This suggests that despite the recent drop in share price, this insider remains bullish about the company’s prospects.
Over the last year, insiders have bought 12.05m shares worth AU$17m, while selling 1.20m shares worth AU$314k. Overall, the total insider buying outweighs the selling. It is worth noting that insider transactions can provide insight into the company’s direction, but it is essential to consider other factors as well.
Lotus Resources insiders currently own 11% of the company, which is valued at around AU$63m. This level of ownership indicates alignment between insiders and shareholders. The recent insider purchase, along with significant holdings by insiders, suggests that they may believe the share price is undervalued.
While the insider transactions are positive, it is important to be aware that Lotus Resources did not generate a profit over the last twelve months. Therefore, caution is advised when considering this investment. In addition, there are certain warning signs for the company that investors should be aware of.
In conclusion, the drop in Lotus Resources’ stock value has resulted in losses for insiders who made substantial purchases over the past year. Despite this setback, the recent insider purchase and significant insider ownership indicate confidence in the company’s future. However, it is essential to consider all factors and potential risks before making any investment decisions.
Please note that this article does not constitute financial advice. It is always recommended to do thorough research and consult with a professional advisor before making investment decisions.
