Truscott Mining Gains 11%, Insider Trades Reap Benefit

Truscott Mining Corporation Limited (ASX:TRM) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 11% resulting in a AU$867k addition to the company’s market value. As a result, the stock they originally bought for AU$331.9k is now worth AU$392.3k.

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 Truscott Mining

Truscott Mining Insider Transactions Over The Last Year

Earlier in the year, Executive Chairman & MD Peter Smith paid AU$0.043 per share in a AU$239k purchase. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.052. 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.

Peter Smith purchased 7.54m shares over the year. The average price per share was AU$0.044. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insider Ownership

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. Truscott Mining insiders own 68% of the company, currently worth about AU$6.2m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Truscott Mining Insiders?

Our data shows a little insider buying, but no selling, in the last three months. The net investment is not enough to encourage us much. But insiders have shown more of an appetite for the stock, over the last year. It would be great to see more insider buying, but overall it seems like Truscott Mining insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the 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. Case in point: We've spotted 6 warning signs for Truscott Mining you should be aware of, and 5 of these make us uncomfortable.

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.