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Insiders who bought AU$1.30m worth of Eagle Mountain Mining Limited (ASX:EM2) stock in the last year recovered part of their losses as the stock rose by 16% last week. The purchase, however, has proven to be a pricey bet, with losses currently totalling AU$217k.
While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.
See our latest analysis for Eagle Mountain Mining
The Last 12 Months Of Insider Transactions At Eagle Mountain Mining
In the last twelve months, the biggest single purchase by an insider was when MD & Executive Director Charles Bass bought AU$1.2m worth of shares at a price of AU$0.06 per share. That means that an insider was happy to buy shares at above the current price of AU$0.05. 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. 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.
In the last twelve months Eagle Mountain Mining insiders were buying shares, but not selling. 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!
There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It appears that Eagle Mountain Mining insiders own 36% of the company, worth about AU$7.1m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Eagle Mountain Mining Insider Transactions Indicate?
The fact that there have been no Eagle Mountain Mining insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Eagle Mountain Mining and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Eagle Mountain Mining. To help with this, we've discovered 4 warning signs (1 is a bit unpleasant!) that you ought to be aware of before buying any shares in Eagle Mountain Mining.