A CA$3.5m Market Cap Boost Pleasing ToLeading Edge Materials Insiders

Last week, Leading Edge Materials Corp. (CVE:LEM) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 16% last week, resulting in a CA$3.5m increase in the company's market worth, implying a 10% gain on their initial purchase. Put another way, the original CA$1.50m acquisition is now worth CA$1.65m.

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.

See our latest analysis for Leading Edge Materials

Leading Edge Materials Insider Transactions Over The Last Year

The Director Eric Krafft made the biggest insider purchase in the last 12 months. That single transaction was for CA$1.3m worth of shares at a price of CA$0.10 each. That means that an insider was happy to buy shares at around the current price of CA$0.11. Of course they may have changed their mind. But this suggests they are optimistic. 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. Happily, the Leading Edge Materials insiders decided to buy shares at close to current prices. We note that Eric Krafft was both the biggest buyer and the biggest seller.

In the last twelve months insiders purchased 15.00m shares for CA$1.5m. But they sold 500.00k shares for CA$50k. In the last twelve months there was more buying than selling by Leading Edge Materials insiders. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. 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 Leading Edge Materials Have Bought Stock Recently

There has been significantly more insider buying, than selling, at Leading Edge Materials, over the last three months. Insiders spent CA$1.5m on shares. But Director Eric Krafft sold shares worth CA$50k. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.

Does Leading Edge Materials 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. It appears that Leading Edge Materials insiders own 39% of the company, worth about CA$10.0m. 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 Leading Edge Materials Insider Transactions Indicate?

The recent insider purchases are heartening. 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. When combined with notable insider ownership, these factors suggest Leading Edge Materials insiders are well aligned, and that they may think the share price is too low. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Leading Edge Materials. Case in point: We've spotted 4 warning signs for Leading Edge Materials you should be aware of, and 1 of them is concerning.

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.

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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.