Insiders At Aura Minerals Sold US$6.1m In Stock, Alluding To Potential Weakness

The fact that multiple Aura Minerals Inc. (TSE:ORA) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. 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.

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 Aura Minerals

The Director, Fabio Ribeiro, made the biggest insider sale in the last 12 months. That single transaction was for CA$3.3m worth of shares at a price of CA$22.57 each. That means that an insider was selling shares at slightly below the current price (CA$25.61). 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. 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 100% of Fabio Ribeiro's holding.

Insiders in Aura Minerals didn't buy any shares in the last year. 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!

See our latest analysis for Aura Minerals

I will like Aura Minerals better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Aura Minerals Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Aura Minerals shares. In total, Director Fabio Ribeiro sold CA$3.3m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Aura Minerals insiders own about CA$104m worth of shares. That equates to 5.5% 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 Do The Aura Minerals Insider Transactions Indicate?

An insider sold Aura Minerals shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 3 warning signs for Aura Minerals you should be aware of, and 1 of them can't be ignored.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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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