Freehill Mining Insiders May Regret Not Buying More, Market Cap Hits AU$17m

Freehill Mining Limited (ASX:FHS) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 67% resulting in a AU$6.7m addition to the company’s market value. As a result, the stock they originally bought for AU$318.6k is now worth AU$390.6k.

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.

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Freehill Mining Insider Transactions Over The Last Year

The insider Gavin Ross made the biggest insider purchase in the last 12 months. That single transaction was for AU$300k worth of shares at a price of AU$0.004 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.005. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

In the last twelve months Freehill Mining insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

View our latest analysis for Freehill Mining

Freehill Mining 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.

Insiders At Freehill Mining Have Bought Stock Recently

Over the last quarter, Freehill Mining insiders have spent a meaningful amount on shares. In total, insiders bought AU$319k worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.

Does Freehill Mining Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Freehill Mining insiders own about AU$6.2m worth of shares. That equates to 37% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Freehill Mining Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Given that insiders also own a fair bit of Freehill Mining we think they are probably pretty confident of a bright 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. For instance, we've identified 4 warning signs for Freehill Mining (2 are concerning) you should be aware of.

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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.