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It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Legacy Minerals Holdings Limited's (ASX:LGM) case, it's fantastic news for shareholders.
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.
View our latest analysis for Legacy Minerals Holdings
Legacy Minerals Holdings Insider Transactions Over The Last Year
The Independent Non-Executive Chairman David Carland made the biggest insider purchase in the last 12 months. That single transaction was for AU$106k worth of shares at a price of AU$0.14 each. That implies that an insider found the current price of AU$0.14 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the Legacy Minerals Holdings insiders decided to buy shares at close to current prices.
While Legacy Minerals Holdings insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Legacy Minerals Holdings is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
Legacy Minerals Holdings Insiders Bought Stock Recently
We saw some Legacy Minerals Holdings insider buying shares in the last three months. Insiders bought AU$25k worth of shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. However, in this case the amount invested recently is quite small.
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. I reckon it's a good sign if insiders own a significant number of shares in the company. Legacy Minerals Holdings insiders own about AU$5.5m worth of shares. That equates to 37% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The Legacy Minerals Holdings Insider Transactions Indicate?
Insider purchases may have been minimal, in the last three months, but there was no selling at all. The net investment is not enough to encourage us much. But insiders have shown more of an appetite for the stock, over the last year. Overall we don't see anything to make us think Legacy Minerals Holdings insiders are doubting the company, and they do own shares. 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. When we did our research, we found 5 warning signs for Legacy Minerals Holdings (3 don't sit too well with us!) that we believe deserve your full attention.