It sure looks good when public companies have a lot of volume from individual investors, institutions, and large funds on the open market. It proves that the company has something of interest to many groups and that they see their investment as a source of profit or return in the future. Confidence is key here, and that’s a good thing.

What happens if an insider at the company is a significant buyer and insiders control a majority of the shares? Any news of insiders buying up more shares of the company they manage or own is a signal that not only are current operations delivering good value, but that future plans will equate to more.

Taking Control

The recent news that Equinox Gold, the company from which Solaris Resources was born, sold Solaris shares and Warrants to Augusta Investments and another strategic shareholder for up to C$132.5 million was one of those signals. Corporate and insider ownership now accounts for almost 70% of its share structure, giving shareholders and future investors confidence that the people running the show have solid plans for the present and future of the company. Of particular note is the potential for significant porphyry discoveries at the Warintza Project in the coming year and years ahead. 

A Strong Belief

TD Securities sent out a research note about the buying noting that Augusta founder and chairman Richard Warke purchased 7 million units of Solaris from Equinox at C$8.25, a stake totalling C$57.5 million. According to Bloomberg, this makes Solaris the leader by amount when it comes to insider buying in the materials sector (past 12 months). On top of that, Mr. Warke has purchased approximately C$57 million in open market transactions. Looking at the chart since the company went public 8 months ago will give you a clear picture of why. 

Looking Into The Crystal Ball

Since becoming a public company, it has only risen every month, and it seems poised to keep going. TD’s 12-month target price is C$13, but based on the trend since becoming a public company, this seems conservative. Mr. Warke’s buying spree comes on the heels of a 1000% return since the IPO last year, and it’s no wonder management and other insiders love owning the stock. Clearly, they see that the future has the potential to build on the success of the past.

 

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above. 

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