Insiders' CA$1.16m Investments In Red Following Mineral Road Discovery's CA$1.8m Dip In Market Value

Insiders who bought CA$1.16m worth of Mineral Road Discovery Inc.'s (CSE:ROAD) stock at an average buy price of CA$0.072 over the last year may be disappointed by the recent 29% decrease in the stock. 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 CA$807.0k, which is not great.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Mineral Road Discovery

Mineral Road Discovery Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider Damien Reynolds for CA$500k worth of shares, at about CA$0.08 per share. That means that even when the share price was higher than CA$0.05 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for 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. Notably Damien Reynolds was also the biggest seller.

Over the last year, we can see that insiders have bought 16.14m shares worth CA$1.2m. But insiders sold 155.50k shares worth CA$11k. In the last twelve months there was more buying than selling by Mineral Road Discovery insiders. They paid about CA$0.072 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 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.

Insiders At Mineral Road Discovery Have Bought Stock Recently

Over the last quarter, Mineral Road Discovery insiders have spent a meaningful amount on shares. We can see that insider Damien Reynolds paid CA$900k for shares in the company. No-one sold. This is a positive in our book as it implies some confidence.

Does Mineral Road Discovery Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Mineral Road Discovery insiders own 58% of the company, worth about CA$3.2m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Mineral Road Discovery Tell Us?

It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Mineral Road Discovery. One for the watchlist, at least! 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. You'd be interested to know, that we found 5 warning signs for Mineral Road Discovery and we suggest you have a look.

But note: Mineral Road Discovery 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.