Insiders Buying Cleghorn Minerals Might Wish They Invested More, Stock Gains 38%

Last week, Cleghorn Minerals Ltd. (CVE:CZZ) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 38% last week, resulting in a CA$581k increase in the company's market worth, implying a 40% gain on their initial purchase. In other words, the original CA$256.1k purchase is now worth CA$359.5k.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

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Cleghorn Minerals Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by CEO, President Glenn Mullan for CA$100k worth of shares, at about CA$0.05 per share. That means that an insider was happy to buy shares at around the current price of CA$0.055. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. In this case we're pleased to report that the insider purchases were made at close to current prices.

In the last twelve months Cleghorn Minerals insiders were buying shares, but not selling. They paid about CA$0.039 on average. To my mind it is good that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

View our latest analysis for Cleghorn Minerals

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

Insider Ownership Of Cleghorn Minerals

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Cleghorn Minerals insiders own 57% of the company, currently worth about CA$885k based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Cleghorn Minerals Insider Transactions Indicate?

The fact that there have been no Cleghorn Minerals insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, Cleghorn Minerals insiders feel good about the company's future. While it's good to be aware of 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. For example - Cleghorn Minerals has 4 warning signs we think you should be aware of.

But note: Cleghorn Minerals 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 of direct interests only, but not derivative transactions or indirect interests.

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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.