Cobre Insiders Benefit From Selling Stock At AU$0.052

While it’s been a great week for Cobre Limited (ASX:CBE) shareholders after stock gained 11%, company insiders might have missed out on those gains after selling stock earlier this year. Had they waited, they might have been able to sell their stock at much higher prices and thereby received a better value on their investment.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Cobre

The Last 12 Months Of Insider Transactions At Cobre

The Co-Founder & Executive Chairman, Martin Holland, made the biggest insider sale in the last 12 months. That single transaction was for AU$100k worth of shares at a price of AU$0.052 each. That means that an insider was selling shares at slightly below the current price (AU$0.06). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 12% of Martin Holland's holding. Martin Holland was the only individual insider to sell over the last year.

The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Does Cobre 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data indicates that Cobre insiders own about AU$2.9m worth of shares (which is 13% of the company). Whilst better than nothing, we're not overly impressed by these holdings.

So What Do The Cobre Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Cobre shares in the last quarter. We don't take much encouragement from the transactions by Cobre insiders. We also note that, as far as we can see, insider ownership is fairly low, compared to other companies. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For instance, we've identified 4 warning signs for Cobre (2 are potentially serious) you should be aware of.

But note: Cobre 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.