M3 Mining Insiders Recover Some Losses, Which Stand At AU$86k

Insiders who purchased AU$342.0k worth of M3 Mining Limited (ASX:M3M) shares over the past year recouped some of their losses after price gained 12% last week. The purchase, however, has proven to be a pricey bet, with losses currently totalling AU$86k.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for M3 Mining

M3 Mining Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Stephen Brockhurst bought AU$285k worth of shares at a price of AU$0.069 per share. That means that even when the share price was higher than AU$0.038 (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. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

While M3 Mining insiders bought shares during the last year, they didn't sell. They paid about AU$0.051 on average. I'd consider this a positive as it suggests insiders see value at around the current price. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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).

M3 Mining Insiders Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at M3 Mining. Executive Director Simon Eley purchased AU$25k worth of shares in that period. We like it when there are only buyers, and no sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. M3 Mining insiders own about AU$1.2m worth of shares. That equates to 37% of the company. 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 Does This Data Suggest About M3 Mining Insiders?

Our data shows a little insider buying, but no selling, in the last three months. That said, the purchases were not large. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think M3 Mining insiders are doubting the company, and they do own shares. 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 4 warning signs for M3 Mining you should be aware of, and 3 of these can't be ignored.

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.