Read This Before Selling Navarre Minerals Limited (ASX:NML) Shares

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in Navarre Minerals Limited (ASX:NML).

Do Insider Transactions Matter?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.

We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

See our latest analysis for Navarre Minerals

Navarre Minerals Insider Transactions Over The Last Year

The insider Stephen Nordstrom made the biggest insider purchase in the last 12 months. That single transaction was for AU$1.6m worth of shares at a price of AU$0.17 each. That means that an insider was happy to buy shares at around the current price of AU$0.20. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the Navarre Minerals insiders decided to buy shares at close to current prices. We note that Stephen Nordstrom was both the biggest buyer and the biggest seller.

Over the last year, we can see that insiders have bought 17.15m shares worth AU$2.2m. On the other hand they divested 800.00k shares, for AU$107k. In total, Navarre Minerals insiders bought more than they sold over the last year. Their average price was about AU$0.13. To my mind it is good that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

Navarre Minerals is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Navarre Minerals Insiders Bought Stock Recently

Over the last quarter, Navarre Minerals insiders have spent a meaningful amount on shares. insider Stephen Nordstrom spent AU$536k on stock, and there wasn't any selling. This makes one think the business has some good points.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 15% of Navarre Minerals shares, worth about AU$16m. 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 Do The Navarre Minerals Insider Transactions Indicate?

It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Given that insiders also own a fair bit of Navarre Minerals we think they are probably pretty confident of a bright future. While we like knowing 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. Every company has risks, and we've spotted 3 warning signs for Navarre Minerals you should know about.

Of course Navarre Minerals 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, but not derivative transactions.

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This article by Simply Wall St is general in nature. 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.
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