Insiders Buying Legacy Minerals Holdings Might Wish They Invested More, Stock Gains 10.0%

Legacy Minerals Holdings Limited (ASX:LGM) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 10.0%, resulting in a AU$2.6m rise in the company's market capitalisation, translating to a gain of 102% on their initial investment. As a result, the stock they originally bought for AU$204.7k is now worth AU$413.9k.

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.

Check out our latest analysis for Legacy Minerals Holdings

Legacy Minerals Holdings Insider Transactions Over The Last Year

The Independent Non-Executive Chairman David Carland made the biggest insider purchase in the last 12 months. That single transaction was for AU$106k worth of shares at a price of AU$0.14 each. We do like to see buying, but this purchase was made at well below the current price of AU$0.28. 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.

Legacy Minerals Holdings insiders may have bought shares in the last year, but they didn't sell any. 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!

Legacy Minerals Holdings 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.

Are Legacy Minerals Holdings Insiders Buying Or Selling?

There was some insider buying at Legacy Minerals Holdings over the last quarter. Independent Non-Executive Director Matthew Wall shelled out AU$9.7k for shares in that time. It's great to see that insiders are only buying, not selling. However, in this case the amount invested recently is quite small.

Does Legacy Minerals Holdings 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. Legacy Minerals Holdings insiders own about AU$11m worth of shares. That equates to 37% of the company. 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 Do The Legacy Minerals Holdings Insider Transactions Indicate?

Our data shows a little insider buying, but no selling, in the last three months. Overall the buying isn't worth writing home about. However, our analysis of transactions over the last year is heartening. Insiders own shares in Legacy Minerals Holdings and we see no evidence to suggest they are worried about the future. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Case in point: We've spotted 5 warning signs for Legacy Minerals Holdings you should be aware of, and 2 of them shouldn't be ignored.

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.

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