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Should You Take Comfort From Insider Transactions At East Asia Minerals Corporation (CVE:EAS)?

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We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in East Asia Minerals Corporation (CVE:EAS).

What Is Insider Buying?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.

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We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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.'

Check out our latest analysis for East Asia Minerals

The Last 12 Months Of Insider Transactions At East Asia Minerals

Chairman & CEO Terrence Filbert made the biggest insider purchase in the last 12 months. That single transaction was for CA$170k worth of shares at a price of CA$0.05 each. That implies that an insider found the current price of CA$0.06 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 East Asia Minerals share holders is that insiders were buying at near the current price. Notably Terrence Filbert was also the biggest seller, having sold CA$16k worth of shares.

Happily, we note that in the last year insiders paid CA$176k for 3.5m shares. On the other hand they divested 230k shares, for CA$16k. In the last twelve months there was more buying than selling by East Asia Minerals insiders. You can see a visual depiction of insider transactions (by 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!

TSXV:EAS Recent Insider Trading, April 29th 2019
TSXV:EAS Recent Insider Trading, April 29th 2019

East Asia Minerals is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

East Asia Minerals Insiders Are Selling The Stock

We have seen a bit of insider selling at East Asia Minerals, over the last three months. Chairman & CEO Terrence Filbert only netted CA$16k selling shares, in that period. It's not great to see insider selling, nor the lack of recent buyers. But the selling simply isn't sufficiently substantial to be of much use as a signal.

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 indicates that East Asia Minerals insiders own about CA$268k worth of shares (which is 5.7% of the company). We do generally prefer see higher levels of insider ownership.

What Might The Insider Transactions At East Asia Minerals Tell Us?

Our data shows a little more insider selling, but no insider buying, in the last three months. However, the sales are not big enough to concern us at all. However, our analysis of transactions over the last year is heartening. While we have no worries about the insider transactions, we'd be more comfortable if they owned more East Asia Minerals 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.

But note: East Asia Minerals 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.