Read This Before Buying Mandalay Resources Corporation (TSE:MND) Shares

We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Mandalay Resources Corporation (TSE:MND), you may well want to know whether insiders have been buying or selling.

Do Insider Transactions Matter?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

Check out our latest analysis for Mandalay Resources

The Last 12 Months Of Insider Transactions At Mandalay Resources

In the last twelve months, the biggest single sale by an insider was when the Lead Independent Director, Abraham Jonker, sold CA$88k worth of shares at a price of CA$2.08 per share. So what is clear is that an insider saw fit to sell at around the current price of CA$1.76. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive). The only individual insider seller over the last year was Abraham Jonker.

Over the last year, we can see that insiders have bought 53.80k shares worth CA$59k. But they sold 95.90k shares for CA$196k. Abraham Jonker sold a total of 95.90k shares over the year at an average price of US$2.05. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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

Have Mandalay Resources Insiders Traded Recently?

We saw some Mandalay Resources insider buying shares in the last three months. Lead Independent Director Abraham Jonker shelled out CA$10k for shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

Does Mandalay Resources Boast High 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Based on our data, Mandalay Resources insiders have about 1.3% of the stock, worth approximately CA$1.9m. We consider this fairly low insider ownership.

So What Do The Mandalay Resources Insider Transactions Indicate?

We note a that there has been a bit of insider buying recently (but no selling). That said, the purchases were not large. The insider transactions at Mandalay Resources are not inspiring us to buy. And we're not picking up on high enough insider ownership to give us any comfort. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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, but not derivative transactions.

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This article by Simply Wall St is general in nature. 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.
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