Insiders Buying Cleghorn Minerals Might Wish They Invested More, Stock Gains 50%

Cleghorn Minerals Ltd. (CVE:CZZ) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 50%, resulting in a CA$690k rise in the company's market capitalisation, translating to a gain of 42% on their initial investment. Put another way, the original CA$381.1k acquisition is now worth CA$542.2k.

Although we don't think shareholders should simply follow insider transactions, 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

Notably, that recent purchase by Glenn Mullan is the biggest insider purchase of Cleghorn Minerals shares that we've seen in the last year. We do like to see buying, but this purchase was made at well below the current price of CA$0.06. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

In the last twelve months Cleghorn Minerals insiders were buying shares, but not selling. The average buy price was around CA$0.042. To my mind it is good 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. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insiders At Cleghorn Minerals Have Bought Stock Recently

It's good to see that Cleghorn Minerals insiders have made notable investments in the company's shares. Not only was there no selling that we can see, but they collectively bought CA$256k worth of shares. This is a positive in our book as it implies some confidence.

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. Cleghorn Minerals insiders own 64% of the company, currently worth about CA$877k based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Cleghorn Minerals Insiders?

It is good to see recent purchasing. And an analysis of the transactions over the last year also gives 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. One for the watchlist, at least! 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 Cleghorn Minerals you should be aware of.

Of course Cleghorn Minerals may not be the best stock to buy. So you may wish to see this free collection of high quality 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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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.