Several Hudbay Minerals Insiders Sell Shares Sending Potential Negative Signal

Hudbay Minerals Inc. (TSE:HBM) shareholders may have reason to be concerned, as several insiders sold their shares over the past year. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

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.

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The Last 12 Months Of Insider Transactions At Hudbay Minerals

In the last twelve months, the biggest single sale by an insider was when the insider, Gregory Dryden, sold CA$396k worth of shares at a price of CA$13.20 per share. That means that an insider was selling shares at around the current price of CA$13.17. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.

In the last twelve months insiders purchased 16.70k shares for CA$177k. On the other hand they divested 43.19k shares, for CA$561k. In total, Hudbay Minerals 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 click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

See our latest analysis for Hudbay Minerals

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Hudbay Minerals Insiders Are Selling The Stock

Over the last three months, we've seen notably more insider selling, than insider buying, at Hudbay Minerals. In that time, insider Gregory Dryden dumped CA$396k worth of shares. Meanwhile Chief Financial Officer Chi-Yen Lei bought CA$17k worth. Because the selling vastly outweighs the buying, we'd say this is a somewhat bearish sign.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From our data, it seems that Hudbay Minerals insiders own 0.2% of the company, worth about CA$9.5m. Whilst better than nothing, we're not overly impressed by these holdings.

What Might The Insider Transactions At Hudbay Minerals Tell Us?

The stark truth for Hudbay Minerals is that there has been more insider selling than insider buying in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But it is good to see that Hudbay Minerals is growing earnings. When you consider that most companies have higher levels of insider ownership, we're a little wary. So we'd only buy after very 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. At Simply Wall St, we found 1 warning sign for Hudbay Minerals that deserve your attention before buying any shares.

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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.