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It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Miramar Resources Limited's (ASX:M2R) case, it's fantastic news for shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
Miramar Resources Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by insider David Cleary for AU$282k worth of shares, at about AU$0.16 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.20. 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.
In the last twelve months insiders purchased 2.18m shares for AU$370k. On the other hand they divested 113.64k shares, for AU$25k. Overall, Miramar Resources insiders were net buyers during the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
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.
Miramar Resources Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at Miramar Resources. Overall, two insiders shelled out AU$296k for shares in the company -- and none sold. That shows some optimism about the company's future.
Does Miramar Resources Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Miramar Resources insiders own about AU$3.4m worth of shares. That equates to 30% 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 Does This Data Suggest About Miramar Resources Insiders?
It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest Miramar Resources insiders are well aligned, and that they may think the share price is too low. 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 Miramar Resources is showing 3 warning signs in our investment analysis, and 2 of those are a bit concerning...
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. 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.
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