When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Chalice Mining Limited's (ASX:CHN) instance, it's good news for shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Chalice Mining Insider Transactions Over The Last Year
The insider, Stephen Quin, made the biggest insider sale in the last 12 months. That single transaction was for AU$82k worth of shares at a price of AU$9.76 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of AU$5.08. So it may not shed much light on insider confidence at current levels. The only individual insider seller over the last year was Stephen Quin.
Happily, we note that in the last year insiders paid AU$158k for 38.05k shares. But they sold 8.38k shares for AU$82k. In the last twelve months there was more buying than selling by Chalice Mining insiders. The average buy price was around AU$4.16. 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. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Chalice Mining is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders At Chalice Mining Have Bought Stock Recently
It's good to see that Chalice Mining insiders have made notable investments in the company's shares. Not only was there no selling that we can see, but they collectively bought AU$158k worth of shares. This could be interpreted as suggesting a positive outlook.
Does Chalice Mining Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Chalice Mining insiders own 13% of the company, currently worth about AU$254m 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 Chalice Mining Tell Us?
The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Chalice Mining insiders are well aligned, and quite possibly think the share price is too low. Nice! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 4 warning signs for Chalice Mining (of which 2 don't sit too well with us!) 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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