Oceanic Iron Ore Insiders Make Handsome Sum Selling Stock At CA$0.21 Per Share

While it’s been a great week for Oceanic Iron Ore Corp. (CVE:FEO) shareholders after stock gained 17%, company insiders might have missed out on those gains after selling stock earlier this year. They could have sold their shares at much higher prices and gotten a better return on their investment if they had waited.

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.

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Oceanic Iron Ore Insider Transactions Over The Last Year

Notably, that recent sale by Frank Giustra is the biggest insider sale of Oceanic Iron Ore shares that we've seen in the last year. So it's clear an insider wanted to take some cash off the table, even below the current price of CA$0.24. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 12% of Frank Giustra's holding.

Over the last year, we can see that insiders have bought 567.24k shares worth CA$88k. But they sold 1.65m shares for CA$347k. In total, Oceanic Iron Ore insiders sold more than they bought over the last year. They sold for an average price of about CA$0.21. It's not particularly great to see insiders were selling shares at below recent prices. Since insiders sell for many reasons, we wouldn't put too much weight on it. 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!

View our latest analysis for Oceanic Iron Ore

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Oceanic Iron Ore Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Oceanic Iron Ore shares. In total, insiders dumped CA$347k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Does Oceanic Iron Ore Boast High 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. Oceanic Iron Ore insiders own about CA$6.2m worth of shares. That equates to 22% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Oceanic Iron Ore Insider Transactions Indicate?

Insiders sold stock recently, but they haven't been buying. And our longer term analysis of insider transactions didn't bring confidence, either. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We're in no rush to buy! 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. When we did our research, we found 4 warning signs for Oceanic Iron Ore (2 make us uncomfortable!) that we believe deserve your full attention.

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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.