Cleghorn Minerals Insiders May Regret Not Buying More, Market Cap Hits CA$1.7m

Last week, Cleghorn Minerals Ltd. (CVE:CZZ) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 40% last week, resulting in a CA$690k increase in the company's market worth, implying a 14% gain on their initial purchase. As a result, their original purchase of CA$278.5k worth of stock is now worth CA$316.7k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Cleghorn Minerals

Cleghorn Minerals Insider Transactions Over The Last Year

The Independent Director Joseph Groia made the biggest insider purchase in the last 12 months. That single transaction was for CA$70k worth of shares at a price of CA$0.05 each. We do like to see buying, but this purchase was made at well below the current price of CA$0.07. 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.

Cleghorn Minerals insiders may have bought shares in the last year, but they didn't sell any. The average buy price was around CA$0.062. It is certainly positive to see that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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

Cleghorn Minerals Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Cleghorn Minerals. Overall, three insiders shelled out CA$125k for shares in the company -- and none sold. This is a positive in our book as it implies some confidence.

Does Cleghorn Minerals Boast High 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. It's great to see that Cleghorn Minerals insiders own 45% of the company, worth about CA$780k. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Cleghorn Minerals Insider Transactions Indicate?

The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Cleghorn Minerals. Looks promising! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Cleghorn Minerals. When we did our research, we found 5 warning signs for Cleghorn Minerals (4 don't sit too well with us!) that we believe deserve your full attention.

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 of direct interests only, but not derivative transactions or indirect interests.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.