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Should You Take Comfort From Insider Transactions At Xiana Mining Inc. (CVE:XIA)?

Simply Wall St

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It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in Xiana Mining Inc. (CVE:XIA).

Do Insider Transactions Matter?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.

Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'

View our latest analysis for Xiana Mining

The Last 12 Months Of Insider Transactions At Xiana Mining

Chairman Carlos Ballon Barraza made the biggest insider purchase in the last 12 months. That single transaction was for CA$641k worth of shares at a price of CA$0.43 each. That means that an insider was happy to buy shares at above the current price of CA$0.39. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares is very important. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Carlos Ballon Barraza was the only individual insider to buy over the year.

Carlos Ballon Barraza bought 1.5m shares over the last 12 months at an average price of CA$0.43. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

TSXV:XIA Recent Insider Trading, July 9th 2019

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 of Xiana Mining

Many investors like to check how much of a company is owned by 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. Xiana Mining insiders own about CA$13m worth of shares (which is 61% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Xiana Mining Insiders?

It doesn't really mean much that no insider has traded Xiana Mining shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. With high insider ownership and encouraging transactions, it seems like Xiana Mining insiders think the business has merit. Along with insider transactions, I recommend checking if Xiana Mining is growing revenue. This free chart of historic revenue and earnings should make that easy.

But note: Xiana Mining 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.