Rebecca Holland-Kennedy has been the CEO of PepinNini Minerals Limited (ASX:PNN) since 2013, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether PepinNini Minerals pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for PepinNini Minerals

How Does Total Compensation For Rebecca Holland-Kennedy Compare With Other Companies In The Industry?

According to our data, PepinNini Minerals Limited has a market capitalization of AU$2.9m, and paid its CEO total annual compensation worth AU$196k over the year to June 2020. This means that the compensation hasn't changed much from last year. In particular, the salary of AU$174.8k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below AU$277m, reported a median total CEO compensation of AU$309k. This suggests that Rebecca Holland-Kennedy is paid below the industry median. Furthermore, Rebecca Holland-Kennedy directly owns AU$317k worth of shares in the company.

On an industry level, around 70% of total compensation represents salary and 30% is other remuneration. PepinNini Minerals pays out 89% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion – which is generally tied to performance, is lower.

PepinNini Minerals Limited's Growth

PepinNini Minerals Limited's earnings per share (EPS) grew 40% per year over the last three years. In the last year, its revenue is up 39%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has PepinNini Minerals Limited Been A Good Investment?

Since shareholders would have lost about 87% over three years, some PepinNini Minerals Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary…

As previously discussed, Rebecca is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, the EPS growth over three years is certainly impressive. Considering EPS are on the up, we would say Rebecca is compensated fairly. But we believe shareholders would want to see healthier returns before the CEO gets a raise.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 4 warning signs (and 2 which don't sit too well with us) in PepinNini Minerals we think you should know about.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

This article by Simply Wall St is general in nature. 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@simplywallst.com.

Buying shares in the best businesses can build meaningful wealth for you and your family. And we've seen some truly amazing gains over the years. Don't believe it? Then look at the Abcourt Mines Inc. (CVE:ABI) share price. It's 529% higher than it was five years ago. If that doesn't get you thinking about long term investing, we don't know what will. On top of that, the share price is up 132% in about a quarter.

It really delights us to see such great share price performance for investors.

See our latest analysis for Abcourt Mines

Abcourt Mines wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last 5 years Abcourt Mines saw its revenue grow at 34% per year. Even measured against other revenue-focussed companies, that's a good result. Arguably, this is well and truly reflected in the strong share price gain of 44%(per year) over the same period. Despite the strong run, top performers like Abcourt Mines have been known to go on winning for decades. On the face of it, this looks lke a good opportunity, although we note sentiment seems very positive already.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

It's good to see that Abcourt Mines has rewarded shareholders with a total shareholder return of 175% in the last twelve months. Since the one-year TSR is better than the five-year TSR (the latter coming in at 44% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Take risks, for example – Abcourt Mines has 2 warning signs we think you should be aware of.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA exchanges.

This article by Simply Wall St is general in nature. 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@simplywallst.com.

This article will reflect on the compensation paid to Warwick Davies who has served as CEO of Resource Mining Corporation Limited (ASX:RMI) since 2010. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Resource Mining

How Does Total Compensation For Warwick Davies Compare With Other Companies In The Industry?

According to our data, Resource Mining Corporation Limited has a market capitalization of AU$4.1m, and paid its CEO total annual compensation worth AU$89k over the year to June 2020. We note that's an increase of 8.7% above last year. Notably, the salary of AU$89k is the entirety of the CEO compensation.

On comparing similar-sized companies in the industry with market capitalizations below AU$278m, we found that the median total CEO compensation was AU$309k. This suggests that Warwick Davies is paid below the industry median.

Talking in terms of the industry, salary represented approximately 70% of total compensation out of all the companies we analyzed, while other remuneration made up 30% of the pie. Speaking on a company level, Resource Mining prefers to tread along a traditional path, disbursing all compensation through a salary. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Resource Mining Corporation Limited's Growth Numbers

Resource Mining Corporation Limited has seen its earnings per share (EPS) increase by 13% a year over the past three years. Its revenue is up 3.0% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Resource Mining Corporation Limited Been A Good Investment?

We think that the total shareholder return of 100%, over three years, would leave most Resource Mining Corporation Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary…

Resource Mining pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we noted earlier, Resource Mining pays its CEO lower than the norm for similar-sized companies belonging to the same industry. Considering robust EPS growth, we believe Warwick to be modestly paid. Plus, we can't ignore the impressive shareholder returns, and won't be surprised if some shareholders were to reward such excellent all-around performance with a raise.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 4 warning signs for Resource Mining (of which 3 don't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

Important note: Resource Mining is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

This article by Simply Wall St is general in nature. 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@simplywallst.com.

We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in Lindian Resources Limited (ASX:LIN).

Do Insider Transactions Matter?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.

Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

View our latest analysis for Lindian Resources

Lindian Resources Insider Transactions Over The Last Year

The Non-Executive Chairman Asimwe Herman Kabunga made the biggest insider purchase in the last 12 months. That single transaction was for AU$200k worth of shares at a price of AU$0.016 each. Even though the purchase was made at a significantly lower price than the recent price (AU$0.023), 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.

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!

Lindian Resources is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does Lindian Resources Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 32% of Lindian Resources shares, worth about AU$4.7m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Lindian Resources Tell Us?

The fact that there have been no Lindian Resources insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. Overall we don't see anything to make us think Lindian Resources insiders are doubting the company, and they do own shares. 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. Our analysis shows 6 warning signs for Lindian Resources (3 are a bit concerning!) and we strongly recommend you look at them before investing.

But note: Lindian 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. 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@simplywallst.com.

Andrew Woskett became the CEO of Minotaur Exploration Limited (ASX:MEP) in 2010, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Minotaur Exploration

Comparing Minotaur Exploration Limited's CEO Compensation With the industry

Our data indicates that Minotaur Exploration Limited has a market capitalization of AU$35m, and total annual CEO compensation was reported as AU$466k for the year to June 2020. That's a notable increase of 25% on last year. Notably, the salary which is AU$339.3k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below AU$279m, reported a median total CEO compensation of AU$309k. This suggests that Andrew Woskett is paid more than the median for the industry. Furthermore, Andrew Woskett directly owns AU$125k worth of shares in the company.

On an industry level, around 70% of total compensation represents salary and 30% is other remuneration. Although there is a difference in how total compensation is set, Minotaur Exploration more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion – which is generally tied to performance, is lower.

Minotaur Exploration Limited's Growth

Minotaur Exploration Limited's earnings per share (EPS) grew 29% per year over the last three years. It saw its revenue drop 70% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Minotaur Exploration Limited Been A Good Investment?

Most shareholders would probably be pleased with Minotaur Exploration Limited for providing a total return of 33% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude…

As we noted earlier, Minotaur Exploration pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. As a result of the excellent all-round performance of the company, we believe CEO compensation is fair. Given the strong history of shareholder returns, the shareholders are probably very happy with Andrew's performance.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 5 warning signs for Minotaur Exploration you should be aware of, and 2 of them are potentially serious.

Important note: Minotaur Exploration is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

This article by Simply Wall St is general in nature. 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@simplywallst.com.

We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell GTI Resources Limited (ASX:GTR), you may well want to know whether insiders have been buying or selling.

What Is Insider Selling?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.

We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

See our latest analysis for GTI Resources

The Last 12 Months Of Insider Transactions At GTI Resources

The insider Tolga Kumova made the biggest insider purchase in the last 12 months. That single transaction was for AU$149k worth of shares at a price of AU$0.01 each. We do like to see buying, but this purchase was made at well below the current price of AU$0.02. 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.

The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

GTI Resources is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insider Ownership of GTI Resources

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. GTI Resources insiders own about AU$3.3m worth of shares. That equates to 25% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About GTI Resources Insiders?

It doesn't really mean much that no insider has traded GTI Resources shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in GTI Resources and their transactions don't cause us concern. 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 GTI Resources has 4 warning signs (2 don't sit too well with us!) that deserve your attention before going any further with your analysis.

But note: GTI 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. 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@simplywallst.com.

This article will reflect on the compensation paid to Chris Ringrose who has served as CEO of Cullen Resources Limited (ASX:CUL) since 2006. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Cullen Resources.

Check out our latest analysis for Cullen Resources

Comparing Cullen Resources Limited's CEO Compensation With the industry

Our data indicates that Cullen Resources Limited has a market capitalization of AU$8.4m, and total annual CEO compensation was reported as AU$206k for the year to June 2020. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at AU$180.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below AU$279m, we found that the median total CEO compensation was AU$303k. That is to say, Chris Ringrose is paid under the industry median.

On an industry level, around 69% of total compensation represents salary and 31% is other remuneration. According to our research, Cullen Resources has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Cullen Resources Limited's Growth Numbers

Cullen Resources Limited's earnings per share (EPS) grew 25% per year over the last three years. In the last year, its revenue is up 1,657%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Cullen Resources Limited Been A Good Investment?

Since shareholders would have lost about 30% over three years, some Cullen Resources Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude…

As we touched on above, Cullen Resources Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Importantly though, the company has impressed with its EPS growth over three years. Although we would've liked to see positive investor returns, it would be bold of us to criticize CEO compensation when EPS are up. But shareholders will likely want to hold off on any raise for Chris until investor returns are positive.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 5 warning signs for Cullen Resources you should be aware of, and 4 of them are concerning.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

This article by Simply Wall St is general in nature. 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@simplywallst.com.

To find a multi-bagger stock, what are the underlying trends we should look for in a business? Typically, we'll want to notice a trend of growing return on capital employed (ROCE) and alongside that, an expanding base of capital employed. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. With that in mind, we've noticed some promising trends at Admiralty Resources (ASX:ADY) so let's look a bit deeper.

What is Return On Capital Employed (ROCE)?

If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. To calculate this metric for Admiralty Resources, this is the formula:

Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets – Current Liabilities)

0.0095 = AU$175k ÷ (AU$23m – AU$4.6m) (Based on the trailing twelve months to June 2020).

Thus, Admiralty Resources has an ROCE of 0.9%. In absolute terms, that's a low return and it also under-performs the Metals and Mining industry average of 9.9%.

Check out our latest analysis for Admiralty Resources

While the past is not representative of the future, it can be helpful to know how a company has performed historically, which is why we have this chart above. If you're interested in investigating Admiralty Resources' past further, check out this free graph of past earnings, revenue and cash flow.

So How Is Admiralty Resources' ROCE Trending?

Shareholders will be relieved that Admiralty Resources has broken into profitability. The company was generating losses five years ago, but has managed to turn it around and as we saw earlier is now earning 0.9%, which is always encouraging. On top of that, what's interesting is that the amount of capital being employed has remained steady, so the business hasn't needed to put any additional money to work to generate these higher returns. With no noticeable increase in capital employed, it's worth knowing what the company plans on doing going forward in regards to reinvesting and growing the business. Because in the end, a business can only get so efficient.

The Key Takeaway

In summary, we're delighted to see that Admiralty Resources has been able to increase efficiencies and earn higher rates of return on the same amount of capital. Astute investors may have an opportunity here because the stock has declined 16% in the last five years. So researching this company further and determining whether or not these trends will continue seems justified.

Admiralty Resources does have some risks, we noticed 4 warning signs (and 2 which are concerning) we think you should know about.

If you want to search for solid companies with great earnings, check out this free list of companies with good balance sheets and impressive returns on equity.

This article by Simply Wall St is general in nature. 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@simplywallst.com.

Peter Schwann has been the CEO of Aruma Resources Limited (ASX:AAJ) since 2010, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Aruma Resources

Comparing Aruma Resources Limited's CEO Compensation With the industry

At the time of writing, our data shows that Aruma Resources Limited has a market capitalization of AU$11m, and reported total annual CEO compensation of AU$105k for the year to June 2020. Notably, that's a decrease of 52% over the year before. In particular, the salary of AU$95.8k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below AU$279m, reported a median total CEO compensation of AU$303k. Accordingly, Aruma Resources pays its CEO under the industry median. Moreover, Peter Schwann also holds AU$279k worth of Aruma Resources stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 69% of total compensation represents salary and 31% is other remuneration. Aruma Resources is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion – which is generally tied to performance, is lower.

A Look at Aruma Resources Limited's Growth Numbers

Aruma Resources Limited's earnings per share (EPS) grew 29% per year over the last three years. It achieved revenue growth of 22% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Aruma Resources Limited Been A Good Investment?

With a total shareholder return of 11% over three years, Aruma Resources Limited shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary…

As we touched on above, Aruma Resources Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But over the last three years, EPS growth has been growing rapidly, which is a great sign for the company. Unfortunately, although shareholder returns are growing, they haven't impressed us as much in comparison, over the same period. We would wish for better returns (whether dividends or capital gains) but we do admire the solidEPS growth on show here. So it's fair to say Peter has done quite well despite modest compensation and shareholders might not be averse to a raise.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 5 warning signs for Aruma Resources (4 shouldn't be ignored!) that you should be aware of before investing here.

Switching gears from Aruma Resources, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

This article by Simply Wall St is general in nature. 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@simplywallst.com.

It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we'll take a look at whether insiders have been buying or selling shares in Viking Mines Limited (ASX:VKA).

What Is Insider Buying?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

See our latest analysis for Viking Mines

The Last 12 Months Of Insider Transactions At Viking Mines

Over the last year, we can see that the biggest insider purchase was by Executive Chairman of the Board Raymond Whitten for AU$309k worth of shares, at about AU$0.01 per share. Even though the purchase was made at a significantly lower price than the recent price (AU$0.016), 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.

The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

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

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Viking Mines insiders own about AU$1.3m worth of shares. That equates to 26% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Viking Mines Insiders?

There haven't been any insider transactions in the last three months — that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. Overall we don't see anything to make us think Viking Mines insiders are doubting the company, and they do own shares. 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. Be aware that Viking Mines is showing 4 warning signs in our investment analysis, and 2 of those shouldn't be ignored…

Of course Viking Mines may not be the best stock to buy. So you may wish to see this free collection 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.

This article by Simply Wall St is general in nature. 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@simplywallst.com.

Rob Rutherford has been the CEO of Red Metal Limited (ASX:RDM) since 2003, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Red Metal.

Check out our latest analysis for Red Metal

Comparing Red Metal Limited's CEO Compensation With the industry

At the time of writing, our data shows that Red Metal Limited has a market capitalization of AU$27m, and reported total annual CEO compensation of AU$302k for the year to June 2020. That's a notable decrease of 26% on last year. Notably, the salary which is AU$230.0k, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below AU$283m, we found that the median total CEO compensation was AU$309k. From this we gather that Rob Rutherford is paid around the median for CEOs in the industry. What's more, Rob Rutherford holds AU$1.4m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 69% of total compensation represents salary, while the remainder of 31% is other remuneration. Red Metal pays out 76% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion – which is generally tied to performance, is lower.

A Look at Red Metal Limited's Growth Numbers

Over the past three years, Red Metal Limited has seen its earnings per share (EPS) grow by 62% per year. In the last year, its revenue is up 297%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Red Metal Limited Been A Good Investment?

Given the total shareholder loss of 36% over three years, many shareholders in Red Metal Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude…

As previously discussed, Rob is compensated close to the median for companies of its size, and which belong to the same industry. On the other hand, the company has logged negative shareholder returns over the previous three years. However, EPS growth is positive over the same time frame. Overall, we wouldn't say Rob is paid an unjustified compensation, but shareholders might not favor a raise before shareholder returns show a positive trend.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 5 warning signs for Red Metal (of which 1 is a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

This article by Simply Wall St is general in nature. 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@simplywallst.com.

Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of permanent loss is the risk I worry about… and every practical investor I know worries about.' So it seems the smart money knows that debt – which is usually involved in bankruptcies – is a very important factor, when you assess how risky a company is. Importantly, Berkeley Energia Limited (ASX:BKY) does carry debt. But the more important question is: how much risk is that debt creating?

When Is Debt Dangerous?

Debt and other liabilities become risky for a business when it cannot easily fulfill those obligations, either with free cash flow or by raising capital at an attractive price. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. However, a more common (but still painful) scenario is that it has to raise new equity capital at a low price, thus permanently diluting shareholders. Of course, the upside of debt is that it often represents cheap capital, especially when it replaces dilution in a company with the ability to reinvest at high rates of return. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.

Check out our latest analysis for Berkeley Energia

How Much Debt Does Berkeley Energia Carry?

As you can see below, at the end of June 2020, Berkeley Energia had AU$75.3m of debt, up from AU$36.0m a year ago. Click the image for more detail. But it also has AU$91.8m in cash to offset that, meaning it has AU$16.4m net cash.

A Look At Berkeley Energia's Liabilities

Zooming in on the latest balance sheet data, we can see that Berkeley Energia had liabilities of AU$78.8m due within 12 months and no liabilities due beyond that. Offsetting these obligations, it had cash of AU$91.8m as well as receivables valued at AU$1.44m due within 12 months. So it actually has AU$14.4m more liquid assets than total liabilities.

This short term liquidity is a sign that Berkeley Energia could probably pay off its debt with ease, as its balance sheet is far from stretched. Succinctly put, Berkeley Energia boasts net cash, so it's fair to say it does not have a heavy debt load! The balance sheet is clearly the area to focus on when you are analysing debt. But it is Berkeley Energia's earnings that will influence how the balance sheet holds up in the future. So if you're keen to discover more about its earnings, it might be worth checking out this graph of its long term earnings trend.

While it hasn't made a profit, at least Berkeley Energia booked its first revenue as a publicly listed company, in the last twelve months.

So How Risky Is Berkeley Energia?

By their very nature companies that are losing money are more risky than those with a long history of profitability. And we do note that Berkeley Energia had an earnings before interest and tax (EBIT) loss, over the last year. And over the same period it saw negative free cash outflow of AU$7.4m and booked a AU$43m accounting loss. Given it only has net cash of AU$16.4m, the company may need to raise more capital if it doesn't reach break-even soon. Importantly, Berkeley Energia's revenue growth is hot to trot. While unprofitable companies can be risky, they can also grow hard and fast in those pre-profit years. The balance sheet is clearly the area to focus on when you are analysing debt. However, not all investment risk resides within the balance sheet – far from it. For instance, we've identified 2 warning signs for Berkeley Energia that you should be aware of.

At the end of the day, it's often better to focus on companies that are free from net debt. You can access our special list of such companies (all with a track record of profit growth). It's free.

This article by Simply Wall St is general in nature. 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@simplywallst.com.

This article will reflect on the compensation paid to Jim Shedd who has served as CEO of Intra Energy Corporation Limited (ASX:IEC) since 2016. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Intra Energy.

Check out our latest analysis for Intra Energy

How Does Total Compensation For Jim Shedd Compare With Other Companies In The Industry?

Our data indicates that Intra Energy Corporation Limited has a market capitalization of AU$3.5m, and total annual CEO compensation was reported as AU$496k for the year to June 2020. Notably, that's an increase of 9.3% over the year before. Notably, the salary of AU$496k is the entirety of the CEO compensation.

On comparing similar-sized companies in the industry with market capitalizations below AU$283m, we found that the median total CEO compensation was AU$355k. Hence, we can conclude that Jim Shedd is remunerated higher than the industry median.

On an industry level, roughly 76% of total compensation represents salary and 24% is other remuneration. On a company level, Intra Energy prefers to reward its CEO through a salary, opting not to pay Jim Shedd through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion – which is generally tied to performance, is lower.

Intra Energy Corporation Limited's Growth

Over the past three years, Intra Energy Corporation Limited has seen its earnings per share (EPS) grow by 21% per year. In the last year, its revenue is up 9.3%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Intra Energy Corporation Limited Been A Good Investment?

Intra Energy Corporation Limited has generated a total shareholder return of 13% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary…

Intra Energy pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we noted earlier, Intra Energy pays its CEO higher than the norm for similar-sized companies belonging to the same industry. But the company has impressed us with its EPS growth, over three years. Looking at the same time period, we think that the shareholder returns are respectable. While it may be worth researching further, we don't see a problem with the high CEO pay, given the good EPS growth.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 4 warning signs (and 2 which make us uncomfortable) in Intra Energy we think you should know about.

Important note: Intra Energy is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

This article by Simply Wall St is general in nature. 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@simplywallst.com.

Toronto, Ontario–(Newsfile Corp. – September 25, 2020) – Jubilee Gold Exploration Ltd. (TSXV: JUB) (the "Company") is pleased to announce the closing of a non-brokered private placement of 130,000 Class A Common Shares in the capital of the Company ("Class A Common Shares"), at a price of $0.65 per Class A Common Share and gross proceeds of $84,500 (the "Private Placement"). The Company intends to use the proceeds from the Private Placement for general working capital purposes.

No commission, finder's fee or similar payment (whether in the form of cash, securities or an interest in assets) were paid by the Company in connection with the Private Placement.

The Class A Common Shares issued in connection with the Private Placement are subject to a statutory hold period of four months plus one day from the date of completion of the Private Placement, in accordance with applicable securities legislation.

The Private Placement was approved by the Company's board of directors by means of a unanimous resolution. The TSX Venture Exchange provided final acceptance of the Offering on September 24, 2020.

For further information contact:

Name: Summer Becker – Director
Office: (416) 364-0042
Email: thebeckergroup@bellnet.ca

This news release contains forward-looking statements, which address future events and conditions, which are subject to various risks and uncertainties. The Company's actual results, programs and financial position could differ materially from those anticipated in such forward-looking statements as a result of numerous factors, some of which may be beyond the Company's control. These factors include: the availability of funds; the timing and content of work programs; results of exploration activities and development of mineral properties, the interpretation of drilling results and other geological data, the uncertainties of resource and reserve estimations, receipt and security of mineral property titles; project cost overruns or unanticipated costs and expenses, fluctuations in metal prices; currency fluctuations; and general market and industry conditions.

Forward-looking statements are based on the expectations and opinions of the Company's management on the date the statements are made. The assumptions used in the preparation of such statements, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accept responsibility for the adequacy or accuracy of this release.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/64634

The full-year results for New Hope Corporation Limited (ASX:NHC) were released last week, making it a good time to revisit its performance. Things were not great overall, with a surprise (statutory) loss of AU$0.19 per share on revenues of AU$1.1b, even though the analysts had been expecting a profit. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for New Hope

After the latest results, the consensus from New Hope's five analysts is for revenues of AU$810.5m in 2021, which would reflect a sizeable 25% decline in sales compared to the last year of performance. Statutory losses are forecast to balloon 90% to AU$0.019 per share. In the lead-up to this report, the analysts had been modelling revenues of AU$890.1m and earnings per share (EPS) of AU$0.10 in 2021. There looks to have been a significant drop in sentiment regarding New Hope's prospects after these latest results, with a small dip in revenues and the analysts now forecasting a loss instead of a profit.

The consensus price target fell 10% to AU$1.62, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on New Hope, with the most bullish analyst valuing it at AU$2.20 and the most bearish at AU$1.10 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast revenue decline of 25%, a significant reduction from annual growth of 22% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.0% annually for the foreseeable future. It's pretty clear that New Hope's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts are expecting New Hope to become unprofitable next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on New Hope. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for New Hope going out to 2025, and you can see them free on our platform here..

You can also see whether New Hope is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

This article by Simply Wall St is general in nature. 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@simplywallst.com.

Graeme Drew is the CEO of AusQuest Limited (ASX:AQD), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for AusQuest.

Check out our latest analysis for AusQuest

Comparing AusQuest Limited's CEO Compensation With the industry

According to our data, AusQuest Limited has a market capitalization of AU$20m, and paid its CEO total annual compensation worth AU$219k over the year to June 2020. That's mostly flat as compared to the prior year's compensation. In particular, the salary of AU$200.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under AU$278m, the reported median total CEO compensation was AU$302k. This suggests that AusQuest remunerates its CEO largely in line with the industry average. What's more, Graeme Drew holds AU$508k worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 68% of total compensation represents salary and 32% is other remuneration. AusQuest is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion – which is generally tied to performance, is lower.

AusQuest Limited's Growth

AusQuest Limited has seen its earnings per share (EPS) increase by 12% a year over the past three years. In the last year, its revenue is down 44%.

Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has AusQuest Limited Been A Good Investment?

We think that the total shareholder return of 76%, over three years, would leave most AusQuest Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary…

As we touched on above, AusQuest Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. The company is growing EPS and total shareholder returns have been pleasing. Although the pay is close to the industry median, overall performance is excellent, so we don't think the CEO is paid too generously. Stockholders might even be okay with a bump in pay, seeing as how investor returns have been so strong.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 5 warning signs for AusQuest you should be aware of, and 2 of them are a bit concerning.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

This article by Simply Wall St is general in nature. 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@simplywallst.com.

THUNDER BAY, Ontario, Sept. 22, 2020 (GLOBE NEWSWIRE) — Mr. Pierre Gagné, Mr. Chris Dougherty and Mr. Donald Sheldon announce that on September 18, 2020 Mr. Gagné acquired ownership of or control over an additional 6,048,350 common shares (each, a “Common Share”) in the capital of MetalCorp Limited (“MetalCorp” or the “Issuer”) (TSXV: MTC), Mr. Dougherty acquired ownership of or control over an additional 6,740,166 Common Shares and Mr. Sheldon acquired ownership of or control over an additional 7,585,835 Common Shares, respectively, at a price of $0.03 per Common Share through settlement of debts with the Issuer.

Prior to acquiring such Common Shares, (i) Mr. Gagné owned or controlled 16,610,382 Common Shares representing approximately 16.95% of the issued and outstanding Common Shares and 2,000,000 stock options that, if exercised, would have represented approximately 2.04% of the issued and outstanding Common Shares, (ii) Mr. Dougherty owned or controlled 7,842,830 Common Shares representing approximately 8.00% of the issued and outstanding Common Shares and 2,000,000 stock options that, if exercised, would have represented approximately 2.04% of the issued and outstanding Common Shares, and (iii) Mr. Sheldon owned or controlled 1,365,707 Common Shares representing approximately 1.39% of the issued and outstanding Common Shares and 2,000,000 stock options that, if exercised, would have represented approximately 2.04% of the issued and outstanding Common Shares, provided that, for the purposes of National Instrument 62-104, Mr. Sheldon is deemed to beneficially own 3,809,610 Common Shares which Mr. Sheldon or entities which he controls lent to the Issuer in 2019 and 2013 and, accordingly, for the purposes of National Instrument 62-104, Mr. Sheldon is considered to have had ownership, control and beneficial ownership of 5,175,317 Common Shares representing approximately 5.28% of the issued and outstanding Common Shares and 2,000,000 stock options that, if exercised, would have represented approximately 2.04% of the issued and outstanding Common Shares (calculated on a diluted basis).

As a result of the above-noted acquisition, (i) Mr. Gagné now owns or controls 22,658,732 Common Shares representing approximately 18.96% of the issued and outstanding Common Shares and 2,000,000 stock options that, if exercised, would represent approximately 1.57% of the issued and outstanding Common Shares (calculated on a diluted basis), (ii) Mr. Dougherty now owns or controls 14,582,996 Common Shares representing approximately 12.20% of the issued and outstanding Common Shares and 2,000,000 stock options that, if exercised, would represent approximately 1.57% of the issued and outstanding Common Shares (calculated on a diluted basis) and (iii) Mr. Sheldon now owns or controls 8,951,542 Common Shares representing approximately 7.49% of the issued and outstanding Common Shares and 2,000,000 stock options that, if exercised, would represent approximately 1.57% of the issued and outstanding Common Shares (calculated on a diluted basis) provided that, for the purposes of National Instrument 62-104, Mr. Sheldon is now considered to have ownership, control and beneficial ownership of 12,761,152 Common Shares representing approximately 10.68% of the issued and outstanding Common Shares and 2,000,000 stock options that, if exercised, would represent approximately 1.57% of the issued and outstanding Common Shares (calculated on a diluted basis).

Mr. Gagné Mr. Dougherty and Mr. Sheldon have no present intention of acquiring additional securities of MetalCorp (other than with respect to the proposed acquisition of 729,500 Common Shares by Pierre Gagné Contracting Ltd. conditional on approval by disinterested shareholders of the Issuer which is being sought at a shareholders meeting currently scheduled to be held on December 8, 2020). Depending upon their evaluation of the business, prospects and financial condition of the Issuer, the market for the Issuer’s securities, general economic and tax conditions and other factors, any of them or entities controlled by them may acquire more or sell some or all of their MetalCorp securities.

The shares-for-debt transactions were entered into for the purpose of assisting MetalCorp in reducing its debts and liabilities at a time when it did not have the cash or other resources to pay such debts and liabilities and thereby assist MetalCorp in reducing its working capital deficiency and enabling it to use its limited cash and other financial resources for ongoing operations and other obligations.

MetalCorp relied on the prospectus exemption provided in the National Instrument 45-106, section 2.14 – Securities for Debt in respect of its issuance of the Common Shares.

For more information and to obtain a copy of the early warning reports required by securities legislation and filed on SEDAR under MetalCorp’s company profile at www.sedar.com, please contact:

Pierre Gagné, director of MetalCorp Limited
Telephone: (807) 626-3621
Chris Dougherty, director of MetalCorp Limited
Telephone: (807) 683-1730
Donald Sheldon, Chief Executive Officer and a director of MetalCorp Limited
Telephone: (416) 777-4017
c/o MetalCorp Limited
490 Maureen Street
Thunder Bay, Ontario P7B 6T2

It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in RBR Group Limited (ASX:RBR).

What Is Insider Selling?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.

We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

See our latest analysis for RBR Group

RBR Group Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Non-Executive Director Athol Emerton bought AU$70k worth of shares at a price of AU$0.014 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.01). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

In the last twelve months RBR Group insiders were buying shares, but not selling. They paid about AU$0.01 on average. This is nice to see since it implies that insiders might see value around current prices. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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.

RBR Group Insiders Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at RBR Group. Insiders shelled out AU$65k for shares in that time. It's great to see that insiders are only buying, not selling. However, in this case the amount invested recently is quite small.

Does RBR Group Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that RBR Group insiders own 36% of the company, worth about AU$3.6m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About RBR Group Insiders?

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. Given that insiders also own a fair bit of RBR Group we think they are probably pretty confident of a bright 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. Case in point: We've spotted 6 warning signs for RBR Group you should be aware of, and 4 of them are a bit concerning.

But note: RBR Group 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. 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@simplywallst.com.

If you want to know who really controls Poseidon Nickel Limited (ASX:POS), then you'll have to look at the makeup of its share registry. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. Companies that used to be publicly owned tend to have lower insider ownership.

Poseidon Nickel is not a large company by global standards. It has a market capitalization of AU$143m, which means it wouldn't have the attention of many institutional investors. In the chart below, we can see that institutional investors have bought into the company. Let's take a closer look to see what the different types of shareholders can tell us about Poseidon Nickel.

View our latest analysis for Poseidon Nickel

What Does The Institutional Ownership Tell Us About Poseidon Nickel?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Poseidon Nickel. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Poseidon Nickel, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Poseidon Nickel. Black Mountain Metals LLC is currently the company's largest shareholder with 21% of shares outstanding. For context, the second largest shareholder holds about 13% of the shares outstanding, followed by an ownership of 4.8% by the third-largest shareholder.

On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Poseidon Nickel

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own some shares in Poseidon Nickel Limited. In their own names, insiders own AU$5.4m worth of stock in the AU$143m company. It is good to see some investment by insiders, but I usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.

General Public Ownership

The general public, with a 40% stake in the company, will not easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

It seems that Private Companies own 22%, of the Poseidon Nickel stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Poseidon Nickel (of which 1 makes us a bit uncomfortable!) you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

This article by Simply Wall St is general in nature. 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@simplywallst.com.

There's no doubt that money can be made by owning shares of unprofitable businesses. For example, biotech and mining exploration companies often lose money for years before finding success with a new treatment or mineral discovery. But the harsh reality is that very many loss making companies burn through all their cash and go bankrupt.

Given this risk, we thought we'd take a look at whether Energy Metals (ASX:EME) shareholders should be worried about its cash burn. In this article, we define cash burn as its annual (negative) free cash flow, which is the amount of money a company spends each year to fund its growth. We'll start by comparing its cash burn with its cash reserves in order to calculate its cash runway.

View our latest analysis for Energy Metals

When Might Energy Metals Run Out Of Money?

You can calculate a company's cash runway by dividing the amount of cash it has by the rate at which it is spending that cash. When Energy Metals last reported its balance sheet in June 2020, it had zero debt and cash worth AU$17m. Looking at the last year, the company burnt through AU$707k. So it had a very long cash runway of many years from June 2020. Even though this is but one measure of the company's cash burn, the thought of such a long cash runway warms our bellies in a comforting way. The image below shows how its cash balance has been changing over the last few years.

How Is Energy Metals' Cash Burn Changing Over Time?

Energy Metals didn't record any revenue over the last year, indicating that it's an early stage company still developing its business. Nonetheless, we can still examine its cash burn trajectory as part of our assessment of its cash burn situation. Even though it doesn't get us excited, the 34% reduction in cash burn year on year does suggest the company can continue operating for quite some time. Energy Metals makes us a little nervous due to its lack of substantial operating revenue. So we'd generally prefer stocks from this list of stocks that have analysts forecasting growth.

How Hard Would It Be For Energy Metals To Raise More Cash For Growth?

While Energy Metals is showing a solid reduction in its cash burn, it's still worth considering how easily it could raise more cash, even just to fuel faster growth. Issuing new shares, or taking on debt, are the most common ways for a listed company to raise more money for its business. Many companies end up issuing new shares to fund future growth. By comparing a company's annual cash burn to its total market capitalisation, we can estimate roughly how many shares it would have to issue in order to run the company for another year (at the same burn rate).

Energy Metals' cash burn of AU$707k is about 2.6% of its AU$27m market capitalisation. That means it could easily issue a few shares to fund more growth, and might well be in a position to borrow cheaply.

So, Should We Worry About Energy Metals' Cash Burn?

It may already be apparent to you that we're relatively comfortable with the way Energy Metals is burning through its cash. For example, we think its cash runway suggests that the company is on a good path. Its cash burn reduction wasn't quite as good, but was still rather encouraging! Taking all the factors in this report into account, we're not at all worried about its cash burn, as the business appears well capitalized to spend as needs be. On another note, we conducted an in-depth investigation of the company, and identified 3 warning signs for Energy Metals (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

Of course Energy Metals may not be the best stock to buy. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying.

This article by Simply Wall St is general in nature. 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@simplywallst.com.

The big shareholder groups in Greatland Gold plc (LON:GGP) have power over the company. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Companies that used to be publicly owned tend to have lower insider ownership.

With a market capitalization of UK£884m, Greatland Gold is a decent size, so it is probably on the radar of institutional investors. Our analysis of the ownership of the company, below, shows that institutions own shares in the company. Let's take a closer look to see what the different types of shareholders can tell us about Greatland Gold.

View our latest analysis for Greatland Gold

What Does The Institutional Ownership Tell Us About Greatland Gold?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Greatland Gold does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Greatland Gold's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Greatland Gold. The company's largest shareholder is HBOS Investment Fund Managers Limited, with ownership of 9.1%. In comparison, the second and third largest shareholders hold about 6.5% and 4.2% of the stock. In addition, we found that Gervaise Robert Heddle, the CEO has 2.0% of the shares allocated to his name

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Greatland Gold

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own some shares in Greatland Gold plc. This is a big company, so it is good to see this level of alignment. Insiders own UK£43m worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public holds a 48% stake in Greatland Gold. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Take risks for example – Greatland Gold has 6 warning signs (and 1 which is a bit concerning) we think you should know about.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

This article by Simply Wall St is general in nature. 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@simplywallst.com.

THIS NEWS RELEASE IS NOT FOR DISTRIBUTION IN THE UNITED STATES OR TO U.S. NEWS AGENCIES

TORONTO, Sept. 15, 2020 (GLOBE NEWSWIRE) — CANSTAR RESOURCES INC. (TSXV: ROX) (“Canstar Resources” or the “Company”) is pleased to announce the appointment of Rob Bruggeman as Director and President & CEO of the Company, effective immediately. The Company’s Board of Directors is now comprised of David Palmer, Sam Leung, Patrick Reid, Dennis Peterson and Rob Bruggeman. The Company is also pleased to announce that it has closed the first tranche of the non-brokered private placement for gross proceeds of up to $2.0 million, as announced on September 2, 2020 (the “Offering”).

New CEO and Director

Rob Bruggeman has worked in senior management and consulting roles with mining companies for the past eight years and has invested extensively in the mining sector. Currently, he is Chairman of the Board of AbraPlata Resource Corp., a TSX-Venture listed company focused on silver-gold exploration in Argentina. Prior to joining the mining sector, Mr. Bruggeman spent more than 10 years working in equities research and institutional equities sales & trading roles at several brokerage firms, including five years with TD Securities as VP, Trading Strategy & Research. Mr. Bruggeman is a licensed Professional Engineer (Ontario) and a CFA charter holder.

Mr. Bruggeman commented: “Canstar has an excellent platform for mineral exploration in Newfoundland. I look forward to working with the Canstar team, as well as the technical team from Altius Minerals, on advancing the exploration of Canstar’s district-scale properties in the province. I am especially excited about exploration on the newly optioned Golden Baie Project in south Newfoundland, given the exceptional gold grades discovered at surface recently.”

Canstar would like to thank Mr. Dennis Peterson for his dedication as Interim CEO. Mr. Peterson will continue to serve as Chairman of the Company’s Board of Directors.

First Tranche of Private Placement

The first tranche of the Offering consists of an aggregate of 4,761,920 units (each a “Part & Parcel Unit”) at a price of $0.105 per Part & Parcel Unit for gross proceeds of $500,001.60. Each Part & Parcel Unit was comprised of one (1) common share in the capital of the Company and one common share purchase warrant (a "Warrant") at an exercise price of $0.21 per Warrant for two years from the date of issuance. Canstar intends to close a further $1,500,000 in subscriptions in a second tranche of the Offering, for an aggregate total amount of approximately $2,000,000.

The Company intends to use the net proceeds raised from the Offering for general corporate purposes, working capital, and exploration expenses on the Company’s properties, including Buchan’s/Mary March, Daniel’s Harbour, and Golden Baie. In particular, the proceeds from the sale of Part & Parcel Units will be used to fund the exploration expenditure commitment on the Golden Baie project, subject to the approval of the TSX Venture Exchange (the “TSXV”).

Directors and management of the Company acquired an aggregate of 1,820,050 Part & Parcel Units in the Offering for aggregate proceeds of approximately $191,100, which participation constituted a "related party transaction" as defined under Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”). Such participation is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of the Part & Parcel Units acquired by the insiders, nor the consideration for the Part & Parcel Units paid by such insiders, exceed 25% of the Company's market capitalization.

No finder’s fees were paid on the Offering. All securities issued pursuant to the Offering are subject to the applicable statutory hold period of four months and one day from the closing. The Offering is subject to the final approval of the TSX Venture Exchange.

About Canstar Resources Inc.

Canstar Resources is a mineral exploration and development company focused on creating shareholder value through discovery and development of economic mineral deposits in Newfoundland, Canada. Canstar is in the process of completing option agreements on the Golden Baie Project in south Newfoundland, a large claim package (660 km²) with recently discovered, multiple outcropping gold occurrences. The Company also holds the Buchans-Mary March project and other mineral exploration properties in Newfoundland and Labrador, Canada. Canstar Resources is based in Toronto, Canada and is listed on the TSX Venture Exchange and trades under the symbol ROX-V.

For further information, please contact:

Rob Bruggeman P.Eng., CFA
President & CEO
Email: rob@canstarresources.com
Phone: 1-416-884-3556
www.canstarresources.com

Forward-Looking Statements

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This News Release includes certain "forward-looking statements" which are not comprised of historical facts. Forward-looking statements include estimates and statements that describe the Company’s future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as “believes”, “anticipates”, “expects”, “estimates”, “may”, “could”, “would”, “will”, or “plan”. Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. Although these statements are based on information currently available to the Company, the Company provides no assurance that actual results will meet management’s expectations. Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward looking information in this news release includes, but is not limited to, the Company’s objectives, goals or future plans, statements, exploration results, potential mineralization, the estimation of mineral resources, exploration and mine development plans, timing of the commencement of operations and estimates of market conditions, as well as the anticipated size of the Offering, the Offering price, the anticipated closing date and the completion of the Offering, the anticipated use of the net proceeds from the Offering and the receipt of all necessary approvals. Factors that could cause actual results to differ materially from such forward-looking information include, but are not limited to failure to identify mineral resources, failure to convert estimated mineral resources to reserves, the inability to complete a feasibility study which recommends a production decision, the preliminary nature of metallurgical test results, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, political risks, inability to fulfill the duty to accommodate First Nations and other indigenous peoples, uncertainties relating to the availability and costs of financing needed in the future, changes in equity markets, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects, capital and operating costs varying significantly from estimates and the other risks involved in the mineral exploration and development industry, an inability to complete the Offering on the terms or on the timeline as announced or at all, an inability to predict and counteract the effects of COVID-19 on the business of the Company, including but not limited to the effects of COVID-19 on the price of commodities, capital market conditions, restriction on labour and international travel and supply chains, and those risks set out in the Company’s public documents filed on SEDAR. Although the Company believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.

Whilst it may not be a huge deal, we thought it was good to see that the Oklo Resources Limited (ASX:OKU) MD, CEO & Director, Simon Taylor, recently bought AU$103k worth of stock, for AU$0.26 per share. However, it only increased their shares held by 7.3%, and it wasn't a huge purchase by absolute value, either.

Check out our latest analysis for Oklo Resources

The Last 12 Months Of Insider Transactions At Oklo Resources

Notably, that recent purchase by Simon Taylor is the biggest insider purchase of Oklo Resources shares that we've seen in the last year. That means that an insider was happy to buy shares at around the current price of AU$0.30. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. Happily, the Oklo Resources insiders decided to buy shares at close to current prices.

Oklo Resources insiders may have bought shares in the last year, but they didn't sell any. Their average price was about AU$0.20. We don't deny that it is nice to see insiders buying stock in the company. However, we do note that they were buying at significantly lower prices than today's share price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Oklo Resources is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership of Oklo Resources

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Oklo Resources insiders own about AU$17m worth of shares. That equates to 11% 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 Do The Oklo Resources Insider Transactions Indicate?

It is good 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. Insiders likely see value in Oklo Resources shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Oklo Resources. Case in point: We've spotted 4 warning signs for Oklo Resources you should be aware of, and 2 of them shouldn't be ignored.

But note: Oklo 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. 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@simplywallst.com.

We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Peel Mining Limited (ASX:PEX).

Do Insider Transactions Matter?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

See our latest analysis for Peel Mining

The Last 12 Months Of Insider Transactions At Peel Mining

The Executive Director of Mining & Director James Simpson made the biggest insider purchase in the last 12 months. That single transaction was for AU$520k worth of shares at a price of AU$0.17 each. Even though the purchase was made at a significantly lower price than the recent price (AU$0.27), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Peel Mining insiders may have bought shares in the last year, but they didn't sell any. 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!

Peel Mining is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insiders at Peel Mining Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at Peel Mining. In total, insiders bought AU$1.0m worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.

Insider Ownership of Peel Mining

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 15% of Peel Mining shares, worth about AU$13m, according to our data. But they may have an indirect interest through a corporate structure that we haven't picked up on. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Does This Data Suggest About Peel Mining Insiders?

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. Given that insiders also own a fair bit of Peel Mining we think they are probably pretty confident of a bright future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that Peel Mining is showing 5 warning signs in our investment analysis, and 2 of those are significant…

Of course Peel Mining may not be the best stock to buy. So you may wish to see this free collection 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.

This article by Simply Wall St is general in nature. 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@simplywallst.com.

We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Aspire Mining Limited (ASX:AKM), you may well want to know whether insiders have been buying or selling.

Do Insider Transactions Matter?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, such insiders must disclose their trading activities, and not trade on inside information.

We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

Check out our latest analysis for Aspire Mining

Aspire Mining Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider Tserenpuntsag Tserendamba for AU$34m worth of shares, at about AU$0.021 per share. Even though the purchase was made at a significantly lower price than the recent price (AU$0.078), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Over the last year, we can see that insiders have bought 1.60b shares worth AU$34m. On the other hand they divested 693.66k shares, for AU$63k. In total, Aspire Mining insiders bought more than they sold over the last year. 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!

Aspire Mining is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Aspire Mining Insiders Are Selling The Stock

Over the last three months, we've seen a bit of insider selling at Aspire Mining. In total, insiders sold AU$63k worth of shares in that time. But the good news is that Non-Executive Chairman David Paull bought AU$37k worth. While it's not great to see insider selling, the net amount sold isn't enough for us to want to read anything into it.

Insider Ownership of Aspire Mining

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Aspire Mining insiders own 61% of the company, currently worth about AU$24m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Aspire Mining Tell Us?

We note that there's been a little more insider selling than buying, recently. But the difference is small, and thus, not concerning. But insiders have shown more of an appetite for the stock, over the last year. It would be great to see more insider buying, but overall it seems like Aspire Mining insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for 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. Our analysis shows 4 warning signs for Aspire Mining (1 is significant!) and we strongly recommend you look at these before investing.

Of course Aspire Mining may not be the best stock to buy. So you may wish to see this free collection 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.

This article by Simply Wall St is general in nature. 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@simplywallst.com.

Most readers would already be aware that Copper Strike's (ASX:CSE) stock increased significantly by 15% over the past three months. Given the company's impressive performance, we decided to study its financial indicators more closely as a company's financial health over the long-term usually dictates market outcomes. In this article, we decided to focus on Copper Strike's ROE.

Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. In short, ROE shows the profit each dollar generates with respect to its shareholder investments.

See our latest analysis for Copper Strike

How To Calculate Return On Equity?

ROE can be calculated by using the formula:

Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity

So, based on the above formula, the ROE for Copper Strike is:

17% = AU$565k ÷ AU$3.4m (Based on the trailing twelve months to June 2020).

The 'return' is the yearly profit. That means that for every A$1 worth of shareholders' equity, the company generated A$0.17 in profit.

Why Is ROE Important For Earnings Growth?

We have already established that ROE serves as an efficient profit-generating gauge for a company's future earnings. Depending on how much of these profits the company reinvests or "retains", and how effectively it does so, we are then able to assess a company’s earnings growth potential. Assuming everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don't necessarily bear these characteristics.

Copper Strike's Earnings Growth And 17% ROE

At first glance, Copper Strike seems to have a decent ROE. Further, the company's ROE compares quite favorably to the industry average of 12%. This certainly adds some context to Copper Strike's exceptional 38% net income growth seen over the past five years. We believe that there might also be other aspects that are positively influencing the company's earnings growth. For example, it is possible that the company's management has made some good strategic decisions, or that the company has a low payout ratio.

Next, on comparing Copper Strike's net income growth with the industry, we found that the company's reported growth is similar to the industry average growth rate of 34% in the same period.

Earnings growth is a huge factor in stock valuation. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. This then helps them determine if the stock is placed for a bright or bleak future. One good indicator of expected earnings growth is the P/E ratio which determines the price the market is willing to pay for a stock based on its earnings prospects. So, you may want to check if Copper Strike is trading on a high P/E or a low P/E, relative to its industry.

Is Copper Strike Using Its Retained Earnings Effectively?

Given that Copper Strike doesn't pay any dividend to its shareholders, we infer that the company has been reinvesting all of its profits to grow its business.

Summary

In total, we are pretty happy with Copper Strike's performance. Particularly, we like that the company is reinvesting heavily into its business, and at a high rate of return. Unsurprisingly, this has led to an impressive earnings growth. If the company continues to grow its earnings the way it has, that could have a positive impact on its share price given how earnings per share influence long-term share prices. Not to forget, share price outcomes are also dependent on the potential risks a company may face. So it is important for investors to be aware of the risks involved in the business. You can see the 4 risks we have identified for Copper Strike by visiting our risks dashboard for free on our platform here.

This article by Simply Wall St is general in nature. 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@simplywallst.com.

THIS NEWS RELEASE IS NOT FOR DISTRIBUTION IN THE UNITED STATES OR TO U.S. NEWS AGENCIES

TORONTO, Sept. 02, 2020 (GLOBE NEWSWIRE) — CANSTAR RESOURCES INC. (TSXV: ROX) (“Canstar Resources” or the “Company”) announces that, further to its press release dated August 26, 2020, it is amending the terms (the “Amendment”) of its proposed non-brokered private placement for aggregate gross proceeds of up to $2,000,000 (the “Offering”).

Pursuant to the Amendment, Canstar Resources intends to complete the Offering in two tranches. The first tranche will consist of the sale of up to 4,761,905 units (“Part & Parcel Units”) at a price of $0.105 per Part & Parcel Unit, for gross proceeds of up to $500,000. Each Part & Parcel Unit will be comprised of one common share in the equity of the Company (each, a “Common Share”) and one Common Share purchase warrant (each, a “Part & Parcel Warrant”). Each Part & Parcel Warrant will entitle the subscriber to purchase one additional Common Share at a price of $0.14 until the second (2^nd) anniversary of the closing date of the Offering.

The second tranche will consist of the sale of up to 9,523,810 units (“Regular Units”) at a price of $0.1575 per Regular Unit, for gross proceeds of up to $1,500,000. Each Regular Unit will be comprised of one Common Share and one Common Share purchase warrant (each, a “Regular Warrant”). Each Regular Warrant will entitle the subscriber to purchase one additional Common Share at a price of $0.21 until the second (2^nd) anniversary of the closing date of the Offering.

The Company intends to use the net proceeds raised from the Offering for general corporate purposes, working capital, and exploration expenses on the Company’s properties, including Buchan’s/Mary March, Daniel’s Harbour, and Golden Baie. In particular, the proceeds from the sale of Part & Parcel Units will be used to fund the exploration expenditure commitment on the Golden Baie project, subject to the approval of the TSX Venture Exchange and the closing of this transaction as announced on August 26, 2020.

The Company may pay finder's fees in respect to the Offering. Closing of the Offering is expected on or about September 15, 2020. The Offering is subject to the final approval of the TSX Venture Exchange. Securities issued pursuant to the Offering shall be subject to a four-month plus one day hold period commencing on the day of the closing of the Offering under applicable Canadian securities laws.

It is expected that certain directors, officers and other insiders of the Company (collectively, the “Insiders”) will participate in the Offering. The participation of Insiders in the Offering constitutes a “related party transaction”, as such terms are defined by Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company is relying on an exemption from the formal valuation requirements of MI 61-101 available on the basis of the securities of the Company not being listed on specified markets, including the Toronto Stock Exchange, the New York Stock Exchange, the American Stock Exchange, the NASDAQ or certain overseas stock exchanges. The Company is also relying on the exemption from minority shareholder approval requirements under MI 61-101 as the fair market value of the participation in the Offering by the Insiders does not exceed 25% of the market capitalization of the Company.

The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About Canstar Resources Inc.

Canstar Resources is a mineral exploration and development company focused on creating shareholder value through discovery and development of economic mineral deposits in Newfoundland, Canada. Canstar is in the process of completing option agreements on the Golden Baie Project in south Newfoundland, a large claim package (660 km²) with recently discovered, multiple outcropping gold occurrences. The Company also holds the Buchans-Mary March project and other mineral exploration properties in Newfoundland and Labrador, Canada. Canstar Resources is based in Toronto, Canada and is listed on the TSX Venture Exchange and trades under the symbol ROX-V.

For further information, please contact:

Dennis H. Peterson
Chairman of the Board, Interim President and Chief Executive Officer
Email: info@canstarresources.com
www.canstarresources.com

Forward-Looking Statements

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This News Release includes certain "forward-looking statements" which are not comprised of historical facts. Forward-looking statements include estimates and statements that describe the Company’s future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as “believes”, “anticipates”, “expects”, “estimates”, “may”, “could”, “would”, “will”, or “plan”. Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. Although these statements are based on information currently available to the Company, the Company provides no assurance that actual results will meet management’s expectations. Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward looking information in this news release includes, but is not limited to, the Company’s objectives, goals or future plans, statements, exploration results, potential mineralization, the estimation of mineral resources, exploration and mine development plans, timing of the commencement of operations and estimates of market conditions, as well as the anticipated size of the Offering, the Offering price, the anticipated closing date and the completion of the Offering, the anticipated use of the net proceeds from the Offering, the closing of the Golden Baie property transaction on the terms as announced or at all, and the receipt of all necessary approvals. Factors that could cause actual results to differ materially from such forward-looking information include, but are not limited to failure to identify mineral resources, failure to convert estimated mineral resources to reserves, the inability to complete a feasibility study which recommends a production decision, the preliminary nature of metallurgical test results, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, political risks, inability to fulfill the duty to accommodate First Nations and other indigenous peoples, uncertainties relating to the availability and costs of financing needed in the future, changes in equity markets, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects, capital and operating costs varying significantly from estimates and the other risks involved in the mineral exploration and development industry, an inability to complete the Offering on the terms or on the timeline as announced or at all, an inability to predict and counteract the effects of COVID-19 on the business of the Company, including but not limited to the effects of COVID-19 on the price of commodities, capital market conditions, restriction on labour and international travel and supply chains, and those risks set out in the Company’s public documents filed on SEDAR. Although the Company believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.

There's no doubt that money can be made by owning shares of unprofitable businesses. For example, although software-as-a-service business Salesforce.com lost money for years while it grew recurring revenue, if you held shares since 2005, you'd have done very well indeed. Having said that, unprofitable companies are risky because they could potentially burn through all their cash and become distressed.

So, the natural question for Arafura Resources (ASX:ARU) shareholders is whether they should be concerned by its rate of cash burn. In this report, we will consider the company's annual negative free cash flow, henceforth referring to it as the 'cash burn'. Let's start with an examination of the business' cash, relative to its cash burn.

See our latest analysis for Arafura Resources

How Long Is Arafura Resources' Cash Runway?

You can calculate a company's cash runway by dividing the amount of cash it has by the rate at which it is spending that cash. When Arafura Resources last reported its balance sheet in June 2020, it had zero debt and cash worth AU$23m. Importantly, its cash burn was AU$12m over the trailing twelve months. Therefore, from June 2020 it had roughly 23 months of cash runway. While that cash runway isn't too concerning, sensible holders would be peering into the distance, and considering what happens if the company runs out of cash. However, if we extrapolate the company's recent cash burn trend, then it would have a longer cash run way. Depicted below, you can see how its cash holdings have changed over time.

How Is Arafura Resources' Cash Burn Changing Over Time?

In our view, Arafura Resources doesn't yet produce significant amounts of operating revenue, since it reported just AU$58k in the last twelve months. Therefore, for the purposes of this analysis we'll focus on how the cash burn is tracking. With cash burn dropping by 17% it seems management feel the company is spending enough to advance its business plans at an appropriate pace. Clearly, however, the crucial factor is whether the company will grow its business going forward. For that reason, it makes a lot of sense to take a look at our analyst forecasts for the company.

How Easily Can Arafura Resources Raise Cash?

While Arafura Resources is showing a solid reduction in its cash burn, it's still worth considering how easily it could raise more cash, even just to fuel faster growth. Companies can raise capital through either debt or equity. One of the main advantages held by publicly listed companies is that they can sell shares to investors to raise cash and fund growth. By comparing a company's annual cash burn to its total market capitalisation, we can estimate roughly how many shares it would have to issue in order to run the company for another year (at the same burn rate).

Since it has a market capitalisation of AU$90m, Arafura Resources' AU$12m in cash burn equates to about 13% of its market value. As a result, we'd venture that the company could raise more cash for growth without much trouble, albeit at the cost of some dilution.

Is Arafura Resources' Cash Burn A Worry?

The good news is that in our view Arafura Resources' cash burn situation gives shareholders real reason for optimism. One the one hand we have its solid cash burn relative to its market cap, while on the other it can also boast very strong cash runway. While we're the kind of investors who are always a bit concerned about the risks involved with cash burning companies, the metrics we have discussed in this article leave us relatively comfortable about Arafura Resources' situation. Separately, we looked at different risks affecting the company and spotted 5 warning signs for Arafura Resources (of which 1 shouldn't be ignored!) you should know about.

If you would prefer to check out another company with better fundamentals, then do not miss this free list of interesting companies, that have HIGH return on equity and low debt or this list of stocks which are all forecast to grow.

This article by Simply Wall St is general in nature. 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@simplywallst.com.

The big shareholder groups in Berkeley Energia Limited (ASX:BKY) have power over the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

Berkeley Energia is a smaller company with a market capitalization of AU$145m, so it may still be flying under the radar of many institutional investors. In the chart below, we can see that institutions are noticeable on the share registry. Let's take a closer look to see what the different types of shareholder can tell us about Berkeley Energia.

Check out our latest analysis for Berkeley Energia

What Does The Institutional Ownership Tell Us About Berkeley Energia?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Berkeley Energia. This suggests some credibility amongst professional investors. But we can't rely on that fact alone, since institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Berkeley Energia's historic earnings and revenue, below, but keep in mind there's always more to the story.

Berkeley Energia is not owned by hedge funds. The company's largest shareholder is Computershare Limited, with ownership of 20%. Anglo Pacific Group plc is the second largest shareholder owning 6.8% of common stock, and Majedie Asset Management Limited holds about 4.9% of the company stock. In addition, we found that Robert Behets, the CEO has 0.009628600000000001 of the shares allocated to his name

On further inspection, we found that more than half the company's shares are owned by the top 9 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Berkeley Energia

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own some shares in Berkeley Energia Limited. In their own names, insiders own AU$10m worth of stock in the AU$145m company. Some would say this shows alignment of interests between shareholders and the board, though I generally prefer to see bigger insider holdings. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public holds a 46% stake in BKY. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

Public companies currently own 27% of Berkeley Energia stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Berkeley Energia better, we need to consider many other factors. For instance, we've identified 2 warning signs for Berkeley Energia that you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

This article by Simply Wall St is general in nature. 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@simplywallst.com.

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Andromeda Metals Limited's (ASX:ADN): Andromeda Metals Limited, together with its subsidiaries, operates as a mineral exploration company in Australia. With the latest financial year loss of AU$1.1m and a trailing-twelve month of AU$2.6m, the AU$72m market-cap amplifies its loss by moving further away from its breakeven target. The most pressing concern for investors is ADN’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for ADN, its year of breakeven and its implied growth rate.

View our latest analysis for Andromeda Metals

According to the industry analysts covering ADN, breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of AU$31m in 2022. Therefore, ADN is expected to breakeven roughly 2 years from now. In order to meet this breakeven date, I calculated the rate at which ADN must grow year-on-year. It turns out an average annual growth rate of 52% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving ADN’s growth isn’t the focus of this broad overview, but, bear in mind that typically a metal and mining business has lumpy cash flows which are contingent on the natural resource mined and stage at which the company is operating. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

One thing I’d like to point out is that ADN has no debt on its balance sheet, which is quite unusual for a cash-burning metals and mining company, which usually has a high level of debt relative to its equity. This means that ADN has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on ADN, so if you are interested in understanding the company at a deeper level, take a look at ADN’s company page on Simply Wall St. I’ve also put together a list of essential factors you should further examine:

1. Historical Track Record: What has ADN's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Andromeda Metals’s board and the CEO’s back ground.

3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

This article by Simply Wall St is general in nature. 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@simplywallst.com.