Insiders who bought Eagle Mountain Mining Limited (ASX:EM2) stock in the last 12 months were richly rewarded last week. The company’s market value increased by AU$16m as a result of the stock’s 11% gain over the same period. As a result, their original purchase of AU$2.0m worth of stock is now worth AU$4.7m.
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.
Eagle Mountain Mining Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by MD & Director Charles Bass for AU$2.0m worth of shares, at about AU$0.35 per share. We do like to see buying, but this purchase was made at well below the current price of AU$0.82. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn’t tell us much about what they think of current prices.
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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Eagle Mountain Mining insiders own 41% of the company, currently worth about AU$68m based on the recent share price. 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 Eagle Mountain Mining Insider Transactions Indicate?
It doesn’t really mean much that no insider has traded Eagle Mountain Mining shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. With high insider ownership and encouraging transactions, it seems like Eagle Mountain Mining insiders think the business has merit. 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. Our analysis shows 4 warning signs for Eagle Mountain Mining (2 don’t sit too well with us!) and we strongly recommend you look at these before investing.
But note: Eagle Mountain Mining 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, but not derivative transactions.
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.
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