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When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Champion Iron Limited's (ASX:CIA) instance, it's good news for shareholders.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At Champion Iron
Over the last year, we can see that the biggest insider purchase was by Executive Chairman William O’Keeffe for AU$629k worth of shares, at about AU$6.29 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$4.86). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
In the last twelve months insiders purchased 232.05k shares for AU$1.4m. But insiders sold 31.95k shares worth AU$166k. In total, Champion Iron insiders bought more than they sold over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
View our latest analysis for Champion Iron
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
Insiders At Champion Iron Have Bought Stock Recently
There has been significantly more insider buying, than selling, at Champion Iron, over the last three months. Insiders spent AU$1.4m on shares. On the other hand, Senior Vice-President of Sales François Lavoie netted AU$166k by selling. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.
Does Champion Iron Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Champion Iron insiders own 11% of the company, worth about AU$289m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.