Insider Buyers At Horizon Minerals Sitting On AU$2.7m Profit

Horizon Minerals Limited (ASX:HRZ) insiders who acquired shares over the previous 12 months, can probably afford to ignore the recent 15% decline in the stock price. After accounting for the recent loss, the AU$6.47m worth of shares they purchased is now worth AU$9.21m, suggesting a good return on their investment.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Horizon Minerals

Horizon Minerals Insider Transactions Over The Last Year

The insider Guangping He made the biggest insider purchase in the last 12 months. That single transaction was for AU$6.3m worth of shares at a price of AU$0.045 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.064. 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 Horizon Minerals 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. By clicking on the graph below, you can see the precise details of each insider transaction!

Horizon Minerals 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 Horizon Minerals Have Bought Stock Recently

It's good to see that Horizon Minerals insiders have made notable investments in the company's shares. Overall, two insiders shelled out AU$6.4m for shares in the company -- and none sold. This makes one think the business has some good points.

Does Horizon Minerals Boast High 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Horizon Minerals insiders own 13% of the company, worth about AU$17m. 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 Does This Data Suggest About Horizon Minerals Insiders?

It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest Horizon Minerals insiders are well aligned, and that they may think the share price is too low. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 4 warning signs for Horizon Minerals (of which 3 are concerning!) you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.