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Insiders who bought CA$200.0k worth of Richmond Minerals Inc. (CVE:RMD) stock in the last year have seen some of their losses recouped as the stock gained 20% last week. The purchase, however, has proven to be a pricey bet, with losses currently totalling CA$80k.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
View our latest analysis for Richmond Minerals
Richmond Minerals Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by CFO & Director Philip Chong for CA$200k worth of shares, at about CA$0.05 per share. That means that even when the share price was higher than CA$0.03 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Philip Chong was the only individual insider to buy during the last year.
You can see the insider transactions (by companies and 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!
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Richmond Minerals insiders own about CA$326k worth of shares. That equates to 30% 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 Richmond Minerals Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Richmond Minerals shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Richmond Minerals and we see no evidence to suggest they are worried about the future. 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. Our analysis shows 5 warning signs for Richmond Minerals (4 are a bit concerning!) and we strongly recommend you look at these before investing.