Yahoo Finance Need To Know: MinRex Resources Limited (ASX:MRR) Insiders Have Been Buying Shares
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 shareholders might well want to know whether insiders have been buying or selling shares in MinRex Resources Limited (ASX:MRR).
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 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. 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 MinRex Resources
The Last 12 Months Of Insider Transactions At MinRex Resources
Over the last year, we can see that the biggest insider purchase was by Non-Executive Director James Bahen for AU$150k worth of shares, at about AU$0.012 per share. We do like to see buying, but this purchase was made at well below the current price of AU$0.019. 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.
Happily, we note that in the last year insiders paid AU$320k for 26.67m shares. On the other hand they divested 3.36m shares, for AU$93k. Overall, MinRex Resources 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. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
MinRex 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 MinRex 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 16% of MinRex Resources shares, worth about AU$1.7m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At MinRex Resources Tell Us?
It doesn't really mean much that no insider has traded MinRex Resources shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in MinRex Resources 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 MinRex Resources. Case in point: We've spotted 5 warning signs for MinRex Resources you should be aware of, and 4 of them are a bit concerning.
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.
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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