Insider Buyers Lose AU$58k As True North Copper Sheds AU$5.9m

The recent price decline of 11% in True North Copper Limited's (ASX:TNC) stock may have disappointed insiders who bought AU$143.5k worth of shares at an average price of AU$0.69 in the past 12 months. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only AU$85.2k.

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 True North Copper

The Last 12 Months Of Insider Transactions At True North Copper

In the last twelve months, the biggest single purchase by an insider was when MD & Director Bevan Jones bought AU$100k worth of shares at a price of AU$0.50 per share. That means that even when the share price was higher than AU$0.41 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

True North Copper insiders may have bought shares in the last year, but they didn't sell any. They paid about AU$0.69 on average. I'd consider this a positive as it suggests insiders see value at around the current price. 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!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insiders At True North Copper Have Bought Stock Recently

It's good to see that True North Copper insiders have made notable investments in the company's shares. We can see that MD & Director Bevan Jones paid AU$100k for shares in the company. No-one sold. That shows some optimism about the company's future.

Insider Ownership Of True North Copper

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. From looking at our data, insiders own AU$1.3m worth of True North Copper stock, about 2.7% of the company. However, it's possible that insiders might have an indirect interest through a more complex structure. I generally like to see higher levels of ownership.

So What Does This Data Suggest About True North Copper Insiders?

It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that True North Copper insiders are expecting a bright future. 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. For instance, we've identified 4 warning signs for True North Copper (2 are a bit concerning) you should be aware of.

But note: True North Copper 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 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.