- Metals and Mining
Insiders may be rethinking their AU$888k Infinity Mining Limited (ASX:IMI) investment now that the company has lost AU$2.2m in value
The recent 11% drop in Infinity Mining Limited's (ASX:IMI) stock could come as a blow to insiders who purchased AU$888k worth of stock at an average buy price of AU$0.19 over the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth AU$753k, which is not what they expected.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
View our latest analysis for Infinity Mining
The Last 12 Months Of Insider Transactions At Infinity Mining
Over the last year, we can see that the biggest insider purchase was by CEO & Director Josephus Groot for AU$270k worth of shares, at about AU$0.18 per share. That means that even when the share price was higher than AU$0.17 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
While Infinity Mining insiders bought shares during the last year, they didn't sell. 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!
Infinity Mining is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Have Infinity Mining Insiders Traded Recently?
We saw some Infinity Mining insider buying shares in the last three months. Independent Non Executive Director Michael Kale purchased AU$10k worth of shares in that period. It's great to see that insiders are only buying, not selling. However, in this case the amount invested recently is quite small.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 19% of Infinity Mining shares, worth about AU$3.5m. 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 Infinity Mining Insider Transactions Indicate?
Insider purchases may have been minimal, in the last three months, but there was no selling at all. That said, the purchases were not large. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Infinity Mining and their transactions don't cause us concern. 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. Every company has risks, and we've spotted 6 warning signs for Infinity Mining (of which 3 make us uncomfortable!) you should know about.
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, but not derivative transactions.
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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.
Infinity Mining Limited explores for mineral properties.
Mediocre balance sheet and slightly overvalued.