With Cassius Mining Up 38%, Insider Buyers Count Their Returns

Cassius Mining Limited (ASX:CMD) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 38% resulting in a AU$3.9m addition to the company’s market value. As a result, the stock they originally bought for AU$316.2k is now worth AU$476.3k.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

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Cassius Mining Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Peter Koller bought AU$316k worth of shares at a price of AU$0.015 per share. Even though the purchase was made at a significantly lower price than the recent price (AU$0.022), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's 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!

View our latest analysis for Cassius Mining

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Cassius Mining insiders own 42% of the company, worth about AU$5.9m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Cassius Mining Insider Transactions Indicate?

It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Cassius Mining insiders are well aligned, and quite possibly think the share price is too low. One for the watchlist, at least! 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 4 warning signs for Cassius Mining you should be aware of, and 3 of these can't be ignored.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.