MinRex Resources Limited (ASX:MRR) insiders got a good deal: Sold stock currently worth AU$0.027 at AU$0.028 over the past year

By
Simply Wall St
Published
November 29, 2021
ASX:MRR
Source: Shutterstock

MinRex Resources Limited's (ASX:MRR) stock rose 29% last week, but insiders who sold AU$93k worth of stock over the last year are probably in a more advantageous position. Selling at an average price of AU$0.028, which is higher than the current price, may have been the best move for these insiders because their investment would have been worth less now than when they sold.

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 MinRex Resources

MinRex Resources Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, David Hannon, for AU$93k worth of shares, at about AU$0.028 per share. That means that an insider was selling shares at around the current price of AU$0.027. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive). David Hannon was the only individual insider to sell over the last year.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
ASX:MRR Insider Trading Volume November 30th 2021

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Does MinRex Resources Boast High 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. Insiders own 14% of MinRex Resources shares, worth about AU$2.1m, according to our data. But they may have an indirect interest through a corporate structure that we haven't picked up on. We do generally prefer see higher levels of insider ownership.

So What Does This Data Suggest About MinRex Resources Insiders?

The fact that there have been no MinRex Resources insider transactions recently certainly doesn't bother us. Our analysis of MinRex Resources insider transactions leaves us unenthusiastic. And we're not picking up on high enough insider ownership to give us any comfort. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Every company has risks, and we've spotted 5 warning signs for MinRex Resources (of which 3 shouldn't be ignored!) you should know about.

But note: MinRex Resources may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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, but not derivative transactions.

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