Insiders who bought CA$954k worth of Cantex Mine Development Corp. (CVE:CD) stock in the last year have seen some of their losses recouped as the stock gained 10% last week. However, the purchase is proving to be an expensive wager as insiders are yet to get ahead of their losses which currently stand at CA$281k since the time of purchase.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
Cantex Mine Development Insider Transactions Over The Last Year
The Chairman of the Board Charles Fipke made the biggest insider purchase in the last 12 months. That single transaction was for CA$400k worth of shares at a price of CA$0.50 each. That means that even when the share price was higher than CA$0.27 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
Cantex Mine Development insiders may have bought shares in the last year, but they didn't sell any. Their average price was about CA$0.38. These transactions suggest that insiders have considered the current price attractive. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Cantex Mine Development is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Cantex Mine Development Insiders Bought Stock Recently
It's good to see that Cantex Mine Development insiders have made notable investments in the company's shares. Specifically, Chairman of the Board Charles Fipke bought CA$72k worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.
Does Cantex Mine Development Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Cantex Mine Development insiders own about CA$6.6m worth of shares. That equates to 31% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Cantex Mine Development Tell Us?
It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Given that insiders also own a fair bit of Cantex Mine Development we think they are probably pretty confident of a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Cantex Mine Development. For instance, we've identified 6 warning signs for Cantex Mine Development (3 are concerning) you should be aware of.
But note: Cantex Mine Development 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. 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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