Insider Returns Down To AU$114k As MetalsGrove Mining's Stock Dips 11%

Insiders who bought MetalsGrove Mining Limited (ASX:MGA) in the last 12 months may probably not pay attention to the stock's recent 11% drop. Even after accounting for the recent loss, the AU$413.2k worth of stock purchased by them is now worth AU$526.8k or in other words, their investment continues to give good returns.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for MetalsGrove Mining

The Last 12 Months Of Insider Transactions At MetalsGrove Mining

The Non-Executive Director Haidong Chi made the biggest insider purchase in the last 12 months. That single transaction was for AU$213k worth of shares at a price of AU$0.04 each. We do like to see buying, but this purchase was made at well below the current price of AU$0.051. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

MetalsGrove Mining insiders may have bought shares in the last year, but they didn't sell any. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

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. We usually like to see fairly high levels of insider ownership. It's great to see that MetalsGrove Mining insiders own 47% of the company, worth about AU$2.5m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The MetalsGrove Mining Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. It would be great to see more insider buying, but overall it seems like MetalsGrove Mining insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example, MetalsGrove Mining has 6 warning signs (and 5 which are a bit concerning) we think you should know about.

Of course MetalsGrove Mining may not be the best stock to buy. So you may wish to see this free collection of high quality 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.