The recent 11% drop in Trigg Mining Limited's (ASX:TMG) stock could come as a blow to insiders who purchased AU$112k worth of stock at an average buy price of AU$0.088 over the past 12 months. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only AU$85k.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Trigg Mining Insider Transactions Over The Last Year
The Non-Executive Chairperson Michael Ralston made the biggest insider purchase in the last 12 months. That single transaction was for AU$73k worth of shares at a price of AU$0.10 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.067). Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. 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 Trigg Mining insiders were buying shares, but not selling. The average buy price was around AU$0.088. I'd consider this a positive as it suggests insiders see value at around the current 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!
Trigg Mining 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 Trigg 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data indicates that Trigg Mining insiders own about AU$1.4m worth of shares (which is 13% of the company). Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
So What Do The Trigg Mining Insider Transactions Indicate?
The fact that there have been no Trigg Mining insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. The transactions are fine but it'd be more encouraging if Trigg Mining insiders bought more shares in the company. 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 Trigg Mining is showing 5 warning signs in our investment analysis, and 4 of those are significant...
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.