Stock Analysis

As Brixton Metals Corporation (CVE:BBB) gains 18%, insiders who bought last year may be wishing they had bet higher

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TSXV:BBB
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Brixton Metals Corporation (CVE:BBB) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 18%, resulting in a CA$12m rise in the company's market capitalisation. As a result, their original purchase of CA$495k worth of stock is now worth CA$674k.

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.

Check out the opportunities and risks within the CA Metals and Mining industry.

The Last 12 Months Of Insider Transactions At Brixton Metals

In the last twelve months, the biggest single purchase by an insider was when Independent Director Ian Ball bought CA$300k worth of shares at a price of CA$0.20 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of CA$0.26. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

Happily, we note that in the last year insiders paid CA$495k for 2.59m shares. On the other hand they divested 1.00m shares, for CA$180k. In total, Brixton Metals insiders bought more than they sold over 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!

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TSXV:BBB Insider Trading Volume December 1st 2022

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Based on our data, Brixton Metals insiders have about 2.8% of the stock, worth approximately CA$2.2m. I generally like to see higher levels of ownership.

What Might The Insider Transactions At Brixton Metals Tell Us?

It doesn't really mean much that no insider has traded Brixton Metals shares in the last quarter. However, our analysis of transactions over the last year is heartening. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Brixton Metals stock. 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. Be aware that Brixton Metals is showing 5 warning signs in our investment analysis, and 3 of those are a bit concerning...

But note: Brixton Metals 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, but not derivative transactions.

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Find out whether Brixton Metals is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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