Yahoo Finance Positive Signs As Multiple Insiders Buy Legend Mining Stock
When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Legend Mining Limited's (ASX:LEG) instance, it's good news for shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
See our latest analysis for Legend Mining
The Last 12 Months Of Insider Transactions At Legend Mining
In the last twelve months, the biggest single purchase by an insider was when Executive Chairman Mark Wilson bought AU$94k worth of shares at a price of AU$0.038 per share. That means that an insider was happy to buy shares at above the current price of AU$0.022. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
While Legend Mining insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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 Legend Mining Have Bought Stock Recently
Over the last three months, we've seen a bit of insider buying at Legend Mining. MD & Executive Director Oliver Kiddie shelled out AU$50k for shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. However, in this case the amount invested recently is quite small.
Insider Ownership Of Legend Mining
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. From our data, it seems that Legend Mining insiders own 7.8% of the company, worth about AU$5.0m. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We do generally prefer see higher levels of insider ownership.
What Might The Insider Transactions At Legend Mining Tell Us?
It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Legend Mining insiders are reasonably well aligned, and optimistic for the future. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Every company has risks, and we've spotted 5 warning signs for Legend Mining (of which 3 can't be ignored!) you should know about.
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 of direct interests only, but not derivative transactions or indirect interests.
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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.
