Stock Analysis

CEO & Director Ignacio Bustamante Just Sold A Bunch Of Shares In Hochschild Mining plc (LON:HOC)

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LSE:HOC
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We wouldn't blame Hochschild Mining plc (LON:HOC) shareholders if they were a little worried about the fact that Ignacio Bustamante, the CEO & Director recently netted about UK£1.3m selling shares at an average price of UK£2.18. That's a big disposal, and it decreased their holding size by 32%, which is notable but not too bad.

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Hochschild Mining Insider Transactions Over The Last Year

The Non-Executive Chairman, Eduardo Hochschild Beeck, made the biggest insider sale in the last 12 months. That single transaction was for UK£123m worth of shares at a price of UK£2.00 each. That means that an insider was selling shares at slightly below the current price (UK£2.07). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 24% of Eduardo Hochschild Beeck's holding.

Insiders in Hochschild Mining didn't buy any shares in 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!

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LSE:HOC Insider Trading Volume March 3rd 2021

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Insider Ownership

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Hochschild Mining insiders own about UK£411m worth of shares (which is 39% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Hochschild Mining Insider Transactions Indicate?

An insider hasn't bought Hochschild Mining stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about 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. While conducting our analysis, we found that Hochschild Mining has 4 warning signs and it would be unwise to ignore these.

Of course Hochschild Mining may not be the best stock to buy. So you may wish to see this free collection of high quality 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, but not derivative transactions.

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