Those following along with Saracen Mineral Holdings Limited (ASX:SAR) will no doubt be intrigued by the recent purchase of shares by Raleigh Finlayson, MD & Director of the company, who spent a stonking AU$2.7m on stock at an average price of AU$5.48. Aside from being a solid chunk in its own right, the deft move also saw their holding increase by some 18%.
The Last 12 Months Of Insider Transactions At Saracen Mineral Holdings
Notably, that recent purchase by MD & Director Raleigh Finlayson was not the only time they traded Saracen Mineral Holdings shares this year. Earlier in the year, they sold shares at a price ofAU$3.71 per share in a -AU$3.7m transaction. That means that an insider was selling shares at slightly below the current price (AU$5.11). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 24% of Raleigh Finlayson's stake.
In the last twelve months insiders purchased 1.10m shares for AU$4.5m. But they sold 1000000 shares for AU$3.7m. Overall, Saracen Mineral Holdings insiders were net buyers during the last year. Their average price was about AU$4.10. It's great to see insiders putting their own cash into the company's stock, albeit at below the recent share price. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Does Saracen Mineral Holdings 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. We usually like to see fairly high levels of insider ownership. Insiders own 0.6% of Saracen Mineral Holdings shares, worth about AU$32m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Saracen Mineral Holdings Tell Us?
The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest Saracen Mineral Holdings insiders are well aligned, and that they may think the share price is too low. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Saracen Mineral Holdings. While conducting our analysis, we found that Saracen Mineral Holdings has 2 warning signs and it would be unwise to ignore them.
But note: Saracen Mineral Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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. 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. Thank you for reading.