Don't Ignore The Insider Selling In Fortuna Mining

We'd be surprised if Fortuna Mining Corp. (TSE:FVI) shareholders haven't noticed that the Co-Founder, Jorge Ganoza Durant, recently sold CA$330k worth of stock at CA$7.33 per share. However, the silver lining is that the sale only reduced their total holding by 2.1%, so we're hesitant to read anything much into it, on its own.

See our latest analysis for Fortuna Mining

The Last 12 Months Of Insider Transactions At Fortuna Mining

In fact, the recent sale by Co-Founder Jorge Ganoza Durant was not their only sale of Fortuna Mining shares this year. Earlier in the year, they fetched CA$5.42 per share in a -CA$2.4m sale. That means that even when the share price was below the current price of CA$6.89, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 21% of Jorge Ganoza Durant's holding.

Happily, we note that in the last year insiders paid CA$276k for 70.00k shares. But they sold 872.62k shares for CA$4.6m. In total, Fortuna Mining insiders sold more than they bought over the last year. 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!

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Does Fortuna Mining Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Fortuna Mining insiders own about CA$25m worth of shares. That equates to 1.2% of the company. 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 Does This Data Suggest About Fortuna Mining Insiders?

Insiders haven't bought Fortuna Mining stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. 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 instance, we've identified 3 warning signs for Fortuna Mining (1 is a bit unpleasant) you should be aware of.

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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.

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