With Magna Terra Minerals Up 43%, Insider Buyers Count Their Returns

Magna Terra Minerals Inc. (CVE:MTT) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 43% resulting in a CA$1.2m addition to the company’s market value. In other words, the original CA$209.3k purchase is now worth CA$697.8k.

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 Magna Terra Minerals

The Last 12 Months Of Insider Transactions At Magna Terra Minerals

In fact, the recent purchase by Michael Byron was the biggest purchase of Magna Terra Minerals shares made by an insider individual in the last twelve months, according to our records. We do like to see buying, but this purchase was made at well below the current price of CA$0.05. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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

Insider Ownership Of Magna Terra Minerals

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Insiders own 40% of Magna Terra Minerals shares, worth about CA$1.6m. 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 Magna Terra Minerals Insider Transactions Indicate?

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Given that insiders also own a fair bit of Magna Terra Minerals we think they are probably pretty confident of a bright future. 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. At Simply Wall St, we found 6 warning signs for Magna Terra Minerals that deserve your attention before buying any shares.

But note: Magna Terra Minerals 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.