Selling US$3.7m Of Stock Was Lucrative Decision For K92 Mining Insiders

While K92 Mining Inc. (TSE:KNT) shareholders have enjoyed a good week with stock up 14%, they need remain vigilant. The fact that insiders chose to dispose of US$3.7m worth of stock in the past 12 months even though prices were relatively low could be indicative of some anticipated weakness.

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.

See our latest analysis for K92 Mining

K92 Mining Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the CEO & Director, John Lewins, for CA$3.0m worth of shares, at about CA$7.40 per share. That means that even when the share price was below the current price of CA$9.23, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 10% of John Lewins's stake.

In the last year K92 Mining insiders didn't buy any company stock. 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insider Ownership Of K92 Mining

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 1.8% of K92 Mining shares, worth about CA$39m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About K92 Mining Insiders?

The fact that there have been no K92 Mining insider transactions recently certainly doesn't bother us. Still, the insider transactions at K92 Mining in the last 12 months are not very heartening. But we do like the fact that insiders own a fair chunk of the company. 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. In terms of investment risks, we've identified 1 warning sign with K92 Mining and understanding this should be part of your investment process.

But note: K92 Mining 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.