Insiders Buying Genmin Might Wish They Invested More, Stock Gains 25%

Genmin Limited (ASX:GEN) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 25%, resulting in a AU$21m rise in the company's market capitalisation, translating to a gain of 50% on their initial investment. Put another way, the original US$294.3k acquisition is now worth US$441.4k.

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.

See our latest analysis for Genmin

Genmin Insider Transactions Over The Last Year

The Non-Executive Director Giuseppe Ariti made the biggest insider purchase in the last 12 months. That single transaction was for AU$102k worth of shares at a price of AU$0.10 each. Even though the purchase was made at a significantly lower price than the recent price (AU$0.15), 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.

In the last twelve months Genmin insiders were buying shares, but not selling. 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!

Genmin 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.

Insider Ownership Of Genmin

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. We usually like to see fairly high levels of insider ownership. Our data indicates that Genmin insiders own about AU$12m worth of shares (which is 12% of the company). However, it's possible that insiders might have an indirect interest through a more complex structure. We do generally prefer see higher levels of insider ownership.

What Might The Insider Transactions At Genmin Tell Us?

It doesn't really mean much that no insider has traded Genmin shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think Genmin insiders are doubting the company, and they do own shares. 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. Case in point: We've spotted 4 warning signs for Genmin you should be aware of, and 3 of them are significant.

Of course Genmin may not be the best stock to buy. So you may wish to see this free collection of high quality 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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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com