We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 Copper Mountain Mining Corporation (TSE:CMMC).
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, rules govern insider transactions, and certain disclosures are required.
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. 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'.
Copper Mountain Mining Insider Transactions Over The Last Year
Notably, that recent purchase by President Gilmour Clausen was not the only time they bought Copper Mountain Mining shares this year. Earlier in the year, they paid CA$0.70 per share in a CA$350k purchase. That means that an insider was happy to buy shares at above the current price of CA$0.68. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
Happily, we note that in the last year insiders bought 2.9m shares for a total of CA$2.4m. In the last twelve months Copper Mountain Mining insiders were buying shares, but not selling. The average buy price was around CA$0.84. This is nice to see since it implies that insiders might see value around current prices. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Copper Mountain Mining Insiders Bought Stock Recently
Over the last quarter, Copper Mountain Mining insiders have spent a meaningful amount on shares. Overall, two insiders shelled out CA$110k for shares in the company -- and none sold. That shows some optimism about the company's future.
Does Copper Mountain Mining Boast High Insider Ownership?
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. From our data, it seems that Copper Mountain Mining insiders own 7.8% of the company, worth about CA$10.0m. Whilst better than nothing, we're not overly impressed by these holdings.
So What Does This Data Suggest About Copper Mountain Mining Insiders?
It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss last year, which makes us a little cautious. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Copper Mountain Mining insiders are expecting a bright future. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Copper Mountain Mining.
Of course Copper Mountain Mining may not be the best stock to buy. So you may wish to see this free collection of high quality 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.
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 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. Thank you for reading.