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Several Insiders Invested In Middle Island Resources Flagging Positive News

It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Middle Island Resources Limited's (ASX:MDI) case, it's fantastic news for shareholders.

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.

Check out our latest analysis for Middle Island Resources

The Last 12 Months Of Insider Transactions At Middle Island Resources

Over the last year, we can see that the biggest insider purchase was by insider Daniel Raihani for AU$177k worth of shares, at about AU$0.016 per share. That implies that an insider found the current price of AU$0.017 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. In this case we're pleased to report that the insider purchases were made at close to current prices.

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Over the last year, we can see that insiders have bought 26.00m shares worth AU$432k. But insiders sold 750.00k shares worth AU$19k. Overall, Middle Island Resources insiders were net buyers during the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
insider-trading-volume

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.

Middle Island Resources Insiders Bought Stock Recently

Over the last quarter, Middle Island Resources insiders have spent a meaningful amount on shares. We can see that insider Daniel Raihani paid AU$177k for shares in the company. No-one sold. This could be interpreted as suggesting a positive outlook.

Insider Ownership Of Middle Island Resources

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Insiders own 26% of Middle Island Resources shares, worth about AU$981k. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Middle Island Resources Insiders?

It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Insiders likely see value in Middle Island Resources shares, given these transactions (along with notable insider ownership of the company). 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. For example, Middle Island Resources has 5 warning signs (and 4 which are concerning) we think you should know about.

But note: Middle Island Resources may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.