Hummingbird Resources Falls To UK£0.018, But Insiders Sold At Lower Price

Even though Hummingbird Resources PLC (LON:HUM) has fallen by 17% over the past week , insiders who sold US$42k worth of stock over the past year have had less luck. Given that the average selling price of US$0.022 is still lower than the current share price, insiders would probably have been better off keeping their shares.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Hummingbird Resources

The Last 12 Months Of Insider Transactions At Hummingbird Resources

In fact, the recent sale by Ryan Mancrief was the biggest sale of Hummingbird Resources shares made by an insider individual in the last twelve months, according to our records. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of UK£0.018. So it is hard to draw any strong conclusion from it.

Happily, we note that in the last year insiders paid UK£59k for 2.10m shares. On the other hand they divested 1.89m shares, for UK£42k. In total, Hummingbird Resources insiders bought more than they sold over the last year. They paid about UK£0.028 on average. These transactions suggest that insiders have considered the current price attractive. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Are Hummingbird Resources Insiders Buying Or Selling?

We saw insider selling worth UK£42k in the last three months. But that was only a smidgen more than the UK£42k worth of buying. The net selling is so small that it's hard to draw any conclusions from these recent transactions.

Insider Ownership Of Hummingbird Resources

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Based on our data, Hummingbird Resources insiders have about 3.2% of the stock, worth approximately UK£473k. But they may have an indirect interest through a corporate structure that we haven't picked up on. I generally like to see higher levels of ownership.

What Might The Insider Transactions At Hummingbird Resources Tell Us?

Our data shows a little insider buying, but no selling, in the last three months. Overall the buying isn't worth writing home about. However, our analysis of transactions over the last year is heartening. We'd like to see bigger individual holdings. However, we don't see anything to make us think Hummingbird Resources insiders are doubting the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 4 warning signs for Hummingbird Resources you should be aware of, and 1 of these is potentially serious.

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.