Yahoo Finance Are Insiders Buying Northern Minerals Limited (ASX:NTU) Stock?
We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Northern Minerals Limited (ASX:NTU).
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 logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.
See our latest analysis for Northern Minerals
The Last 12 Months Of Insider Transactions At Northern Minerals
Over the last year, we can see that the biggest insider purchase was by insider Yongquan He for AU$4.7m worth of shares, at about AU$0.02 per share. Even though the purchase was made at a significantly lower price than the recent price (AU$0.041), we still think insider buying is a positive. 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.
Over the last year, we can see that insiders have bought 477.82m shares worth AU$9.3m. But they sold 9.28m shares for AU$298k. Overall, Northern Minerals insiders were net buyers during 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!
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).
Insiders at Northern Minerals Have Sold Stock Recently
The last three months saw some Northern Minerals insider selling. Non-Executive Chairman Colin McCavana divested only AU$20k worth of shares in that time. Neither the lack of buying nor the presence of selling is heartening. But the volume sold is so low that it really doesn't bother us.
Does Northern Minerals Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Northern Minerals insiders own 24% of the company, worth about AU$48m. 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 Does This Data Suggest About Northern Minerals Insiders?
We did not see any insider buying in the last three months, but we did see selling. However, the sales are not big enough to concern us at all. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Northern Minerals and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Northern Minerals. To that end, you should learn about the 5 warning signs we've spotted with Northern Minerals (including 3 which are potentially serious).
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.
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