Insiders Who Purchased AU$1.52m Of Viridis Mining and Minerals Stock May Not Have Expected 10% Tumble

The recent 10% drop in Viridis Mining and Minerals Limited's (ASX:VMM) stock could come as a blow to insiders who purchased AU$1.52m worth of stock at an average buy price of AU$1.15 over the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth AU$522.3k, which is not great.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Viridis Mining and Minerals

The Last 12 Months Of Insider Transactions At Viridis Mining and Minerals

The Executive Chairman of the Board Agha Pervez made the biggest insider purchase in the last 12 months. That single transaction was for AU$1m worth of shares at a price of AU$1.15 each. That means that even when the share price was higher than AU$0.40 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. 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.

In the last twelve months Viridis Mining and Minerals insiders were buying shares, but not selling. 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 plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

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. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Viridis Mining and Minerals insiders own 32% of the company, worth about AU$9.4m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Viridis Mining and Minerals Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Viridis Mining and Minerals shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think Viridis Mining and Minerals insiders are doubting the company, and they do own shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To help with this, we've discovered 4 warning signs (2 are potentially serious!) that you ought to be aware of before buying any shares in Viridis Mining and Minerals.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.