As Silver Mountain Resources Inc.'s market cap (CVE:AGMR) drops to CA$42m, insiders might be questioning their decision to buy earlier this year

By
Simply Wall St
Published
May 07, 2022
TSXV:AGMR
Source: Shutterstock

The recent 13% drop in Silver Mountain Resources Inc.'s (CVE:AGMR) stock could come as a blow to insiders who purchased US$699k worth of stock at an average buy price of US$0.34 over the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth US$459k, which is not great.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Silver Mountain Resources

The Last 12 Months Of Insider Transactions At Silver Mountain Resources

Over the last year, we can see that the biggest insider sale was by the insider, Julio Ortiz, for CA$633k worth of shares, at about CA$0.50 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of CA$0.23. So it is hard to draw any strong conclusion from it. Julio Ortiz was the only individual insider to sell over the last year.

Over the last year, we can see that insiders have bought 2.04m shares worth CA$699k. But insiders sold 1.27m shares worth CA$633k. In total, Silver Mountain Resources insiders bought more than they sold over the last year. Their average price was about CA$0.34. These transactions suggest that insiders have considered the current price attractive. 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!

insider-trading-volume
TSXV:AGMR Insider Trading Volume May 7th 2022

Silver Mountain Resources is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Silver Mountain Resources Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Silver Mountain Resources. In total, insiders bought CA$402k worth of shares in that time, and we didn't record any sales whatsoever. This could be interpreted as suggesting a positive outlook.

Insider Ownership of Silver Mountain Resources

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. Insiders own 24% of Silver Mountain Resources shares, worth about CA$10m. 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 Do The Silver Mountain Resources Insider Transactions Indicate?

It is good to see recent purchasing. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Insiders likely see value in Silver Mountain Resources shares, given these transactions (along with notable insider ownership of the company). While we like knowing 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. To help with this, we've discovered 3 warning signs (1 shouldn't be ignored!) that you ought to be aware of before buying any shares in Silver Mountain Resources.

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, but not derivative transactions.

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