It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Millennial Lithium Corp. (CVE:ML), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
Millennial Lithium Insider Transactions Over The Last Year
There wasn't any very large single transaction over the last year, but we can still observe some trading.
In the last twelve months insiders purchased 113.15k shares for CA$147k. But insiders sold 18900 shares worth CA$33k. In total, Millennial Lithium insiders bought more than they sold over the last year. Their average price was about CA$1.30. These transactions suggest that insiders have considered the current price of CA$1.10 attractive. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Millennial Lithium is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Millennial Lithium Have Bought Stock Recently
Over the last quarter, Millennial Lithium insiders have spent a meaningful amount on shares. Overall, two insiders shelled out CA$70k for shares in the company -- and none sold. That shows some optimism about the company's future.
Insider Ownership of Millennial Lithium
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. From our data, it seems that Millennial Lithium insiders own 8.8% of the company, worth about CA$8.1m. But they may have an indirect interest through a corporate structure that we haven't picked up on. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
What Might The Insider Transactions At Millennial Lithium Tell Us?
The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Millennial Lithium stock. I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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