Collective Mining Gains 10%, Insider Trades Reap Benefit

Collective Mining Ltd. (TSE:CNL) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 10%, resulting in a CA$106m rise in the company's market capitalisation, translating to a gain of 175% on their initial investment. As a result, the stock they originally bought for US$575.0k is now worth US$1.58m.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.

The Last 12 Months Of Insider Transactions At Collective Mining

In the last twelve months, the biggest single purchase by an insider was when insider Pasquale DiCapo bought CA$250k worth of shares at a price of CA$5.00 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of CA$13.74. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

While Collective Mining insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

View our latest analysis for Collective Mining

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).

Does Collective Mining Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Collective Mining insiders own about CA$294m worth of shares (which is 26% of the company). 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 Do The Collective Mining Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Collective Mining shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Judging from their transactions, and high insider ownership, Collective Mining insiders feel good about the company's future. While it's good to be aware of 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. Be aware that Collective Mining is showing 3 warning signs in our investment analysis, and 1 of those shouldn't be ignored...

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.