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Are Insiders Buying ScoZinc Mining Ltd. (CVE:SZM) Stock?

Simply Wall St

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in ScoZinc Mining Ltd. (CVE:SZM).

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.

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. For example, a Columbia 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'.

Check out our latest analysis for ScoZinc Mining

ScoZinc Mining Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when President Mark Stephen Haywood bought CA$150k worth of shares at a price of CA$0.40 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$0.39). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. 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. Mark Stephen Haywood was the only individual insider to buy over the year.

Mark Stephen Haywood purchased 377.00k shares over the year. The average price per share was CA$0.40. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

TSXV:SZM Recent Insider Trading, March 13th 2020

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

Does ScoZinc Mining Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that ScoZinc Mining insiders own 23% of the company, worth about CA$906k. 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 ScoZinc Mining Tell Us?

It doesn't really mean much that no insider has traded ScoZinc Mining shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Insiders own shares in ScoZinc Mining and we see no evidence to suggest they are worried about the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing ScoZinc Mining. Our analysis shows 4 warning signs for ScoZinc Mining (2 shouldn't be ignored!) and we strongly recommend you look at them before investing.

Of course ScoZinc Mining 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.

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.

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. Thank you for reading.