Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of York Harbour Metals Inc. (CVE:YORK), that sends out a positive message to the company's shareholders.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At York Harbour Metals
In the last twelve months, the biggest single purchase by an insider was when insider Eric Sprott bought CA$500k worth of shares at a price of CA$0.50 per share. We do like to see buying, but this purchase was made at well below the current price of CA$0.92. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
Over the last year, we can see that insiders have bought 3.98m shares worth CA$2.9m. But they sold 920.00k shares for CA$386k. Overall, York Harbour Metals insiders were net buyers during the last year. They paid about CA$0.72 on average. To my mind it is good that insiders have invested their own money 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 want to know exactly who sold, for how much, and when, simply click on the graph below!
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.
Insiders at York Harbour Metals Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at York Harbour Metals. We can see that insider Blair Naughty paid CA$892k for shares in the company. No-one sold. This makes one think the business has some good points.
Does York Harbour Metals Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 29% of York Harbour Metals shares, worth about CA$16m. 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 York Harbour Metals Tell Us?
It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Given that insiders also own a fair bit of York Harbour Metals we think they are probably pretty confident of a bright future. 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 York Harbour Metals is showing 5 warning signs in our investment analysis, and 3 of those are significant...
Of course York Harbour Metals may not be the best stock to buy. So you may wish to see this free collection of high quality 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.
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.