Insiders Buying Legacy Minerals Holdings Might Wish They Invested More, Stock Gains 14%

Legacy Minerals Holdings Limited (ASX:LGM) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 14% resulting in a AU$5.0m addition to the company’s market value. In other words, the original AU$180.0k purchase is now worth AU$261.3k.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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The Last 12 Months Of Insider Transactions At Legacy Minerals Holdings

Over the last year, we can see that the biggest insider purchase was by Independent Non-Executive Chairman David Carland for AU$100k worth of shares, at about AU$0.18 per share. Even though the purchase was made at a significantly lower price than the recent price (AU$0.24), 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.

Legacy Minerals Holdings insiders may have bought shares in the last year, but they didn't sell any. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

See our latest analysis for Legacy Minerals Holdings

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Legacy Minerals Holdings Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Legacy Minerals Holdings. We can see that Independent Non-Executive Chairman David Carland paid AU$100k for shares in the company. No-one sold. This could be interpreted as suggesting a positive outlook.

Insider Ownership

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. 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 Legacy Minerals Holdings insiders own 27% of the company, worth about AU$11m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Legacy Minerals Holdings Tell Us?

It is good to see the recent insider purchase. 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 Legacy Minerals Holdings we think they are probably pretty confident of a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Legacy Minerals Holdings. For example, Legacy Minerals Holdings has 6 warning signs (and 3 which make us uncomfortable) we think 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 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.