Insiders of World Copper Getting Good Value On Their CA$1.43m Investment

World Copper Ltd. (CVE:WCU) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 21%, resulting in a CA$3.2m rise in the company's market capitalisation, translating to a gain of 13% on their initial investment. In other words, the original CA$1.43m purchase is now worth CA$1.62m.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for World Copper

The Last 12 Months Of Insider Transactions At World Copper

Over the last year, we can see that the biggest insider purchase was by Director Robert Kopple for CA$1.0m 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$0.085. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Over the last year, we can see that insiders have bought 19.03m shares worth CA$1.4m. But they sold 1.80m shares for CA$180k. Overall, World Copper insiders were net buyers during the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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 World Copper Have Bought Stock Recently

We saw some World Copper insider buying shares in the last three months. Insiders bought CA$37k worth of shares in that time. It's great to see that insiders are only buying, not selling. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. 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 World Copper insiders own 17% of the company, worth about CA$2.9m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At World Copper Tell Us?

We note a that there has been a bit of insider buying recently (but no selling). Overall the buying isn't worth writing home about. But insiders have shown more of an appetite for the stock, over the last year. Insiders own shares in World Copper and we see no evidence to suggest they are worried about the future. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Our analysis shows 5 warning signs for World Copper (3 can't be ignored!) and we strongly recommend you look at them before investing.

But note: World Copper 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.