Latin Metals' Market Cap Up CA$1.6m Following Year Of Insider Stock Buying

Last week, Latin Metals Inc. (CVE:LMS) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 25% last week, resulting in a CA$1.6m increase in the company's market worth, implying a 43% gain on their initial purchase. In other words, the original CA$329.5k purchase is now worth CA$470.2k.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Latin Metals

The Last 12 Months Of Insider Transactions At Latin Metals

Over the last year, we can see that the biggest insider purchase was by Director Robert Kopple for CA$301k worth of shares, at about CA$0.07 per share. We do like to see buying, but this purchase was made at well below the current price of CA$0.10. 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.

Robert Kopple purchased 4.70m shares over the year. The average price per share was CA$0.07. 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!

Latin Metals is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership Of Latin Metals

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Latin Metals insiders own about CA$3.8m worth of shares (which is 47% of the company). 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 Does This Data Suggest About Latin Metals Insiders?

The fact that there have been no Latin Metals insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. Judging from their transactions, and high insider ownership, Latin Metals insiders feel good about the company's future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example, Latin Metals has 6 warning signs (and 5 which are potentially serious) we think you should know about.

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.