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It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Macarthur Minerals Limited (CVE:MMS), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. 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 Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
Macarthur Minerals Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Independent Director, Earl Evans, sold CA$117k worth of shares at a price of CA$0.09 per share. That means that an insider was selling shares at around the current price of CA$0.085. While we don't usually like to see insider selling, it's more concerning if the sales take price at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign. Earl Evans was the only individual insider to sell shares in the last twelve months. However, we would note that Earl currently takes his director's fee in company stock, so we wouldn't be too quick to judge him for selling a few shares.
Earl Evans divested 1.5m shares over the last 12 months at an average price of AU$0.089. 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!
I will like Macarthur Minerals better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
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. From our data, it seems that Macarthur Minerals insiders own 5.7% of the company, worth about CA$1.5m. But they may have an indirect interest through a corporate structure that we haven't picked up on. Whilst better than nothing, we're not overly impressed by these holdings.
So What Does This Data Suggest About Macarthur Minerals Insiders?
An insider sold Macarthur Minerals shares recently, but they didn't buy any. And even if we look to the last year, we didn't see any purchases. When you consider that most companies have higher levels of insider ownership, we're a little wary. We'd certainly think twice before buying! To put this in context, take a look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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 firstname.lastname@example.org. 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.