We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Mammoth Resources Corp. (CVE:MTH).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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'.
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Mammoth Resources Insider Transactions Over The Last Year
President & CEO Thomas Atkins made the biggest insider purchase in the last 12 months. That single transaction was for CA$92k worth of shares at a price of CA$0.05 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$0.03). Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Thomas Atkins was the only individual insider to buy over the year.
Thomas Atkins bought 2.2m shares over the last 12 months at an average price of CA$0.05. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
Mammoth Resources is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does Mammoth Resources Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 11% of Mammoth Resources shares, worth about CA$112k, according to our data. 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!
So What Do The Mammoth Resources Insider Transactions Indicate?
We note a that there has been a bit of insider buying recently (but no selling). That said, the purchases were not large. However, our analysis of transactions over the last year is heartening. The transactions are fine but it'd be more encouraging if Mammoth Resources insiders bought more shares in the company. To put this in context, take a look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .
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.
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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.