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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 shareholders might well want to know whether insiders have been buying or selling shares in Mineral Resources Limited (ASX:MIN).
What Is Insider Selling?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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'.
Mineral Resources Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Timothy Roberts for AU$30m worth of shares, at about AU$14.80 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$14.74). It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Happily, we note that in the last year insiders bought 3.7m shares for a total of AU$55m. While Mineral Resources insiders bought shares last year, they didn't sell. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
Mineral Resources is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Mineral Resources Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at Mineral Resources. Timothy Roberts spent AU$19m on stock, and there wasn't any selling. This makes one think the business has some good points.
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. Mineral Resources insiders own 15% of the company, currently worth about AU$407m 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. When combined with notable insider ownership, these factors suggest Mineral Resources insiders are well aligned, and quite possibly think the share price is too low. One for the watchlist, at least! Of course, the future is what matters most. So if you are interested in Mineral Resources, you should check out this free report on analyst forecasts for the company.
Of course Mineral Resources 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 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.