Miramar Resources Insiders Lose Out As Stock Sinks To AU$0.002
Insiders who acquired AU$318.8k worth of Miramar Resources Limited's (ASX:M2R) stock at an average price of AU$0.0027 in the past 12 months may be dismayed by the recent 33% price decline. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only AU$240.5k.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Miramar Resources Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by insider Timothy Stephen Hanlon for AU$200k worth of shares, at about AU$0.0025 per share. That means that even when the share price was higher than AU$0.002 (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. We always take careful note of the price insiders pay when purchasing 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.
Miramar Resources insiders may have bought shares in the last year, but they didn't sell any. 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 Miramar Resources
Miramar Resources is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
Miramar Resources Insiders Bought Stock Recently
We saw some Miramar Resources insider buying shares in the last three months. Insiders purchased AU$22k worth of shares in that period. We like it when there are only buyers, and no sellers. However, in this case the amount invested recently is quite small.
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. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Miramar Resources insiders own 34% of the company, worth about AU$1.4m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Miramar Resources Insider Transactions Indicate?
Our data shows a little insider buying, but no selling, in the last three months. Overall the buying isn't worth writing home about. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Miramar Resources and their transactions don't cause us concern. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. In terms of investment risks, we've identified 5 warning signs with Miramar Resources and understanding them should be part of your investment process.
But note: Miramar Resources 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 of direct interests only, but not derivative transactions or indirect interests.
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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.