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Should You Take Comfort From Insider Transactions At Lomiko Metals Inc. (CVE:LMR)?

Simply Wall St

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We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Lomiko Metals Inc. (CVE:LMR).

Do Insider Transactions Matter?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'

View our latest analysis for Lomiko Metals

The Last 12 Months Of Insider Transactions At Lomiko Metals

President & CEO Amrit Paul Gill made the biggest insider purchase in the last 12 months. That single transaction was for CA$110k worth of shares at a price of CA$0.045 each. That means that an insider was happy to buy shares at around the current price of CA$0.045. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. In this case we're pleased to report that the insider bought shares at close to current prices. Amrit Paul Gill was the only individual insider to buy shares in the last twelve months. Notably Amrit Paul Gill was also the biggest seller, having sold CA$14k worth of shares.

Amrit Paul Gill bought a total of 4.2m shares over the year at an average price of CA$0.047. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

TSXV:LMR Recent Insider Trading, July 10th 2019

Lomiko Metals is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Does Lomiko Metals Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. From our data, it seems that Lomiko Metals insiders own 8.0% of the company, worth about CA$271k. Whilst better than nothing, we're not overly impressed by these holdings.

So What Do The Lomiko Metals Insider Transactions Indicate?

Our data shows a little insider buying, but no selling, in the last three months. That said, the purchases were not large. But insiders have shown more of an appetite for the stock, over the last year. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Lomiko Metals stock. I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

But note: Lomiko Metals 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 aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.