MetalsGrove Mining Reaches AU$5.2m Market Cap Benefiting Insider Stock Buying

MetalsGrove Mining Limited (ASX:MGA) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 22% resulting in a AU$1.2m addition to the company’s market value. In other words, the original AU$413.2k purchase is now worth AU$619.8k.

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.

See our latest analysis for MetalsGrove Mining

The Last 12 Months Of Insider Transactions At MetalsGrove Mining

In the last twelve months, the biggest single purchase by an insider was when Non-Executive Director Haidong Chi bought AU$213k worth of shares at a price of AU$0.04 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.06. 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.

In the last twelve months MetalsGrove Mining insiders were buying shares, but not selling. 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!

MetalsGrove Mining is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

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. 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 MetalsGrove Mining insiders own 33% of the company, worth about AU$1.7m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At MetalsGrove Mining Tell Us?

The fact that there have been no MetalsGrove Mining insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in MetalsGrove Mining 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. For example, MetalsGrove Mining has 4 warning signs (and 3 which don't sit too well with us) we think you should know about.

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.