Insider Purchases Worth CA$2.06m See Losses As Mirasol Resources Market Value Drops To CA$34m

Insiders who bought CA$2.06m worth of Mirasol Resources Ltd.'s (CVE:MRZ) stock at an average buy price of CA$0.49 over the last year may be disappointed by the recent 14% decrease in the stock. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth CA$1.68m, which is not great.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Mirasol Resources

Mirasol Resources Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Independent Director John Tognetti for CA$1.0m worth of shares, at about CA$0.45 per share. That means that an insider was happy to buy shares at above the current price of CA$0.40. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

While Mirasol Resources insiders bought shares during the last year, they didn't sell. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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

Mirasol Resources Insiders Bought Stock Recently

It's good to see that Mirasol Resources insiders have made notable investments in the company's shares. Specifically, insider Glenn Pountney bought CA$167k worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Mirasol Resources insiders own about CA$12m worth of shares. That equates to 37% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Mirasol Resources Insider Transactions Indicate?

The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Mirasol Resources insiders are well aligned, and that they may think the share price is too low. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Be aware that Mirasol Resources is showing 5 warning signs in our investment analysis, and 3 of those are concerning...

But note: Mirasol Resources 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.