Insiders Enjoy US$1.5m Return After Buying Collective Mining Stock

Insiders who bought Collective Mining Ltd. (TSE:CNL) in the last 12 months may probably not pay attention to the stock's recent 17% drop. After accounting for the recent loss, the US$794.9k worth of shares they purchased is now worth US$2.27m, suggesting a good return on their investment.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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. We do like to see buying, but this purchase was made at well below the current price of CA$12.25. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Overall, Collective Mining insiders were net buyers during the last year. They paid about CA$4.30 on average. We don't deny that it is nice to see insiders buying stock in the company. However, we do note that they were buying at significantly lower prices than today's share price. 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!

Check out our latest analysis for Collective Mining

Collective Mining is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Does Collective Mining Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Collective Mining insiders own 26% of the company, currently worth about CA$273m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Collective Mining Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like Collective Mining insiders think the business has merit. 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 example, Collective Mining has 4 warning signs (and 2 which are concerning) we think you should know about.

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.