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A number of insiders bought Champion Iron Limited (ASX:CIA) stock last year, which is great news for shareholders

It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Champion Iron Limited's (ASX:CIA) case, it's fantastic news for shareholders.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Champion Iron

Champion Iron Insider Transactions Over The Last Year

The Senior Vice President of Corporate Development & Capital Markets Michael Marcotte made the biggest insider purchase in the last 12 months. That single transaction was for AU$96k worth of shares at a price of AU$7.81 each. That means that even when the share price was higher than AU$5.28 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

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While Champion Iron insiders bought shares during the last year, they didn't sell. They paid about AU$5.22 on average. It's great to see insiders putting their own cash into the company's stock, albeit at below the recent share price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
insider-trading-volume

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).

Champion Iron Insiders Bought Stock Recently

It's good to see that Champion Iron insiders have made notable investments in the company's shares. In total, insiders bought AU$232k worth of shares in that time, and we didn't record any sales whatsoever. This could be interpreted as suggesting a positive outlook.

Does Champion Iron Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Champion Iron insiders own 12% of the company, worth about AU$336m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Champion Iron Tell Us?

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Champion Iron. Nice! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. At Simply Wall St, we've found that Champion Iron has 3 warning signs (1 is a bit concerning!) that deserve your attention before going any further with your analysis.

But note: Champion Iron 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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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