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 before you buy or sell Mineral Resources Limited (ASX:MIN), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
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 Colombia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
Mineral Resources Insider Transactions Over The Last Year
Independent Non-Executive Director Timothy Roberts made the biggest insider purchase in the last 12 months. That single transaction was for AU$30m worth of shares at a price of AU$14.80 each. So it’s clear an insider wanted to buy, even at a higher price. Their view may have changed since then, but at least it shows they felt optimistic at the time. That purchase may suggest an expectation of positive returns over the long term.
Happily, we note that in the last year insiders bought 2.41m shares for a total of AU$36m. In the last twelve months there was more buying than selling by Mineral Resources insiders. Their average price was about AU$14.79. These transactions suggest that insiders have considered the current price of AU$14.48 attractive. The chart below shows insider transactions over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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Insiders at Mineral Resources Have Bought Stock Recently
Over the last quarter, Mineral Resources insiders have spent a meaningful amount on shares. Specifically, Timothy Roberts bought AU$30m worth of shares in that time, and we didn’t record any sales whatsoever. This makes one think the business has some good points.
Does Mineral Resources 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. Mineral Resources insiders own 14% of the company, currently worth about AU$378m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Mineral Resources Tell Us?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Mineral Resources. Nice! If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
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To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.