We often see insiders buying up shares in companies that perform well over the long term. 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 we'll take a look at whether insiders have been buying or selling shares in MGX Minerals Inc. (CNSX:XMG).
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, rules govern insider transactions, and certain disclosures are required.
We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
MGX Minerals Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when VP of Exploration & Director Andris Kikauka bought CA$89k worth of shares at a price of CA$0.89 per share. That means that even when the share price was higher than CA$0.25 (the recent price), an insider wanted to purchase shares. 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. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
In the last twelve months insiders purchased 150k shares for CA$119k. But they sold 807k for CA$413k. All up, insiders sold more shares in MGX Minerals than they bought, over the last year. The average sell price was around CA$0.51. Insider selling doesn't make us excited to buy. However, we do note that the average sale price was significantly higher than the current share price (which is CA$0.25). 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 MGX 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.
MGX Minerals Insiders Are Selling The Stock
Over the last three months, we've seen significant insider selling at MGX Minerals. In total, insiders dumped CA$108k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Does MGX Minerals Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. 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 MGX Minerals insiders own 9.0% of the company, worth about CA$3.2m. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
What Might The Insider Transactions At MGX Minerals Tell Us?
Insiders sold stock recently, but they haven't been buying. And our longer term analysis of insider transactions didn't bring confidence, either. When you consider that most companies have higher levels of insider ownership, we're a little wary. As the saying goes, only fools rush in. I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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 email@example.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. Thank you for reading.