Yahoo Finance Yiu Ming of Magmatic Resources Limited (ASX:MAG) Just Spent AU$885k On Shares
Those following along with Magmatic Resources Limited (ASX:MAG) will no doubt be intrigued by the recent purchase of shares by insider Yiu Ming, who spent a stonking AU$885k on stock at an average price of AU$0.13. That purchase boosted their holding by 106%, which makes us wonder if the move was inspired by quietly confident deeply-felt optimism.
View our latest analysis for Magmatic Resources
Magmatic Resources Insider Transactions Over The Last Year
Notably, that recent purchase by Yiu Ming is the biggest insider purchase of Magmatic Resources shares that we've seen in the last year. That means that even when the share price was higher than AU$0.14 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. 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. Notably Yiu Ming was also the biggest seller.
Happily, we note that in the last year insiders paid AU$970k for 7.68m shares. But they sold 1.45m shares for AU$232k. In the last twelve months there was more buying than selling by Magmatic Resources insiders. Their average price was about AU$0.13. We don't deny that it is nice to see insiders buying stock in the company. However, we do note that they were buying at significantly lower prices than today's share price. 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!
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.
Insider Ownership
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Magmatic Resources insiders own 42% of the company, worth about AU$16m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The Magmatic Resources Insider Transactions Indicate?
It is good to see recent purchasing. 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. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Magmatic Resources. One for the watchlist, at least! 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 Magmatic Resources (of which 2 are significant!) 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, but not derivative transactions.
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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.
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