Yahoo Finance Should You Buy Copper Mountain Mining Corporation (TSE:CMMC) When Insiders Do?
Copper Mountain Mining Corporation operates as a mining company in Canada. Copper Mountain Mining’s insiders have invested more than 2.29 million shares in the small-cap stocks within the past three months. A well-known argument is that insiders investing more in their own companies’ shares sends an optimistic signal. The MIT Press (1998) published an article showing that stocks following insider buying outperformed the market by 4.5%. But these signals may not be sufficient to gain confidence on whether to invest. I will be analysing whether these buying activities are supported by favourable future outlook and recent share price volatility. Check out our latest analysis for Copper Mountain Mining
Which Insiders Are Buying?
TSX:CMMC Insider Trading July 20th 18 Over the past three months, more shares have been bought than sold by Copper Mountain Mining’s’ insiders. In total, individual insiders own over 10.3 million shares in the business, which makes up around 5.48% of total shares outstanding. Specifically Alistair Cowden(management and board member) and Gilmour Clausen (board member) increased their holdings. .
Is Future Growth Outlook As Bullish?
At first glance, analysts’ earnings expectations of 52.06% over the next three years illustrates a buoyant outlook going forward which is consistent with the signal company insiders are sending with their net buying activity. Delving deeper into the line items, Copper Mountain Mining is expected to experience a healthy double-digit top-line growth next year, which does not seem to flow into earnings given the highly negative growth expectations. This illustrates high cost growth relative to incoming revenues, and could portray times of high investment and growth in the company. Insiders’ net buying activities seem to support the idea of growth moving forward. Or they may simply view the current share price as too low relative to its intrinsic value.
Did Insiders Buy On Share Price Volatility?
An alternative reason for recent trades could be insiders taking advantage of the share price volatility. A correlation could mean directors are trading on market inefficiencies based on their belief of the company’s intrinsic value. Copper Mountain Mining’s shares ranged between CA$1.42 and CA$1.07 over the past three months. This indicates moderate volatility with a share price movement of 32.71%. This movement could potentially be significant enough to warrant insiders to accrue their shares.
Next Steps:
Copper Mountain Mining’s insider meaningful buying activity tells us the shares are currently in favour, although the expected earnings growth challenges this conclusion, whereas a fairly volatile stock price could be a driver to transact. Although insider buying can be a useful prompt, following the lead of an insider, however, will never replace diligent research. I’ve put together two essential aspects you should look at:
Financial Health: Does Copper Mountain Mining have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Other High Quality Alternatives : Are there other high quality stocks you could be holding instead of Copper Mountain Mining? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing!
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures. To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements. The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
