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Even though Okapi Resources Limited's (ASX:OKR) stock is down 16% this week, insiders who bought lately made a AU$460k profit

Okapi Resources Limited (ASX:OKR) insiders who acquired shares over the previous 12 months, can probably afford to ignore the recent 16% decline in the stock price. Even after accounting for the recent loss, the AU$559k worth of stock purchased by them is now worth AU$1.0m or in other words, their investment continues to give good returns.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Okapi Resources

Okapi Resources Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Executive Director David Nour bought AU$200k worth of shares at a price of AU$0.20 per share. Even though the purchase was made at a significantly lower price than the recent price (AU$0.42), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

Okapi Resources insiders may have bought shares in the last year, but they didn't sell any. They paid about AU$0.23 on average. 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 the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
insider-trading-volume

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insiders at Okapi Resources Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at Okapi Resources. In total, insiders bought AU$85k worth of shares in that time, and we didn't record any sales whatsoever. That shows some optimism about the company's future.

Insider Ownership of Okapi Resources

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. Okapi Resources insiders own about AU$10m worth of shares. That equates to 21% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Okapi Resources Tell Us?

The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Okapi Resources insiders are well aligned, and that they may think the share price is too low. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To that end, you should learn about the 5 warning signs we've spotted with Okapi Resources (including 3 which can't be ignored).

But note: Okapi Resources may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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, but not derivative transactions.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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