Nimy Resources Insider Confidence Rewarded, Stock Hits AU$17m Market Cap

Nimy Resources Limited (ASX:NIM) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 45%, resulting in a AU$5.5m rise in the company's market capitalisation, translating to a gain of 68% on their initial investment. As a result, the stock they originally bought for AU$239.0k is now worth AU$400.7k.

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.

See our latest analysis for Nimy Resources

Nimy Resources Insider Transactions Over The Last Year

In fact, the recent purchase by Neville Hampson was the biggest purchase of Nimy Resources shares made by an insider individual in the last twelve months, according to our records. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.10. 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.

Nimy Resources insiders may have bought shares in the last year, but they didn't sell any. The average buy price was around AU$0.06. To my mind it is good that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. 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!

Nimy Resources is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Nimy Resources Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Nimy Resources. Overall, three insiders shelled out AU$183k for shares in the company -- and none sold. This is a positive in our book as it implies some confidence.

Does Nimy Resources Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. It appears that Nimy Resources insiders own 40% of the company, worth about AU$6.8m. 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 Nimy Resources Insiders?

The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Given that insiders also own a fair bit of Nimy Resources we think they are probably pretty confident of a bright 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, Nimy Resources has 6 warning signs (and 3 which are concerning) we think you should know about.

Of course Nimy Resources 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.