Insiders who bought Connected Minerals Limited (ASX:CML) in the last 12 months may probably not pay attention to the stock's recent 11% drop. After taking the recent loss into consideration, the AU$3.73m worth of stock they bought is now worth AU$6.36m, indicating that their investment yielded a positive return.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
Connected Minerals Insider Transactions Over The Last Year
The Non-Executive Chairman Quentin Flannery made the biggest insider purchase in the last 12 months. That single transaction was for AU$2.9m worth of shares at a price of AU$0.17 each. Even though the purchase was made at a significantly lower price than the recent price (AU$0.25), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
Over the last year, we can see that insiders have bought 25.45m shares worth AU$3.7m. But they sold 2.00m shares for AU$330k. In the last twelve months there was more buying than selling by Connected Minerals insiders. They paid about AU$0.15 on average. It is certainly positive to see that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
View our latest analysis for Connected Minerals
Connected Minerals is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Connected Minerals insiders own 49% of the company, worth about AU$17m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At Connected Minerals Tell Us?
The fact that there have been no Connected Minerals insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. It would be great to see more insider buying, but overall it seems like Connected Minerals insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 3 warning signs for Connected Minerals you should be aware of, and 2 of them shouldn't be ignored.
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 currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.
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