Insiders' CA$1.71m Investments In Red Following Mirasol Resources' CA$6.1m Dip In Market Value

Insiders who acquired CA$1.71m worth of Mirasol Resources Ltd.'s (CVE:MRZ) stock at an average price of CA$0.42 in the past 12 months may be dismayed by the recent 18% price decline. 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$1.38m, 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 do think it is perfectly logical to keep tabs on what insiders are doing.

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Mirasol Resources Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Independent Director John Tognetti bought CA$1.0m worth of shares at a price of CA$0.45 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$0.34). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Mirasol Resources insiders may have bought shares in the last year, but they didn't sell any. 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!

See our latest analysis for Mirasol Resources

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

Over the last three months, we've seen significant insider buying at Mirasol Resources. We can see that insider Glenn Pountney paid CA$353k for shares in the company. No-one sold. This makes one think the business has some good points.

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. Mirasol Resources insiders own about CA$10m worth of shares. That equates to 38% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Mirasol Resources Insiders?

The recent insider purchase is 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. Given that insiders also own a fair bit of Mirasol Resources we think they are probably pretty confident of a bright 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. Our analysis shows 5 warning signs for Mirasol Resources (3 don't sit too well with us!) and we strongly recommend you look at these before investing.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.