It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Capstone Mining Corp. (TSE:CS), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.
The Last 12 Months Of Insider Transactions At Capstone Mining
Over the last year, we can see that the biggest insider purchase was by Non-Executive Chairman George Brack for CA$144k worth of shares, at about CA$0.50 per share. That implies that an insider found the current price of CA$0.50 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for Capstone Mining share holders is that insiders were buying at near the current price.
In the last twelve months Capstone Mining insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by 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 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.
Capstone Mining Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at Capstone Mining. We can see that Non-Executive Chairman George Brack paid US$144k for shares in the company. No-one sold. This is a positive in our book as it implies some confidence.
Does Capstone Mining Boast High Insider Ownership?
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. Our data suggests Capstone Mining insiders own 2.6% of the company, worth about CA$5.2m. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We consider this fairly low insider ownership.
So What Do The Capstone Mining Insider Transactions Indicate?
It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss last year, which makes us a little cautious. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Capstone Mining insiders are reasonably well aligned, and optimistic for the future. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Capstone Mining.
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, but not derivative transactions.
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If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.