Insiders At Kumba Iron Ore Sold R16m In Stock, Alluding To Potential Weakness

The fact that multiple Kumba Iron Ore Limited (JSE:KIO) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, if numerous insiders are selling, shareholders should investigate more.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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The Last 12 Months Of Insider Transactions At Kumba Iron Ore

Over the last year, we can see that the biggest insider sale was by the insider, Themba Mkhwanazi, for R11m worth of shares, at about R370 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is R296. So it is hard to draw any strong conclusion from it.

In the last year Kumba Iron Ore insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, 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 Kumba Iron Ore

I will like Kumba Iron Ore better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Does Kumba Iron Ore Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data suggests Kumba Iron Ore insiders own 0.05% of the company, worth about R51m. I generally like to see higher levels of ownership.

What Might The Insider Transactions At Kumba Iron Ore Tell Us?

It doesn't really mean much that no insider has traded Kumba Iron Ore shares in the last quarter. Our analysis of Kumba Iron Ore insider transactions leaves us cautious. But we do like the fact that insiders own a fair chunk of the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Kumba Iron Ore. Our analysis shows 2 warning signs for Kumba Iron Ore (1 makes us a bit uncomfortable!) and we strongly recommend you look at these before investing.

But note: Kumba Iron Ore 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.