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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 Kingfisher Metals Corp.'s (CVE:KFR) case, it's fantastic news for shareholders.
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.
The Last 12 Months Of Insider Transactions At Kingfisher Metals
Over the last year, we can see that the biggest insider purchase was by insider Alejandro Gubbins Cox for CA$300k worth of shares, at about CA$0.16 per share. We do like to see buying, but this purchase was made at well below the current price of CA$0.29. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
In the last twelve months Kingfisher Metals insiders were buying shares, but not selling. Their average price was about CA$0.19. We don't deny that it is nice to see insiders buying stock in the company. But we must note that the investments were made at well below today's share price. 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 Kingfisher Metals
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).
Kingfisher Metals Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at Kingfisher Metals. Not only was there no selling that we can see, but they collectively bought CA$232k worth of shares. This could be interpreted as suggesting a positive outlook.
Insider Ownership
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 19% of Kingfisher Metals shares, worth about CA$2.9m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Kingfisher Metals Tell Us?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Insiders likely see value in Kingfisher Metals shares, given these transactions (along with notable insider ownership of the company). So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To that end, you should learn about the 5 warning signs we've spotted with Kingfisher Metals (including 3 which are a bit unpleasant).