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Investors who take an interest in Lundin Mining Corporation (TSE:LUN) should definitely note that the President, Jack O. Lundin, recently paid CA$12.13 per share to buy CA$485k worth of the stock. Although the purchase only increased their holding by 5.1%, it is still a solid purchase in our view.
The Last 12 Months Of Insider Transactions At Lundin Mining
Over the last year, we can see that the biggest insider purchase was by Chairman of the Board Adam Lundin for CA$24m worth of shares, at about CA$12.22 per share. That means that even when the share price was higher than CA$11.66 (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. In our view, the price an insider pays for shares is very important. 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.
Happily, we note that in the last year insiders paid CA$40m for 3.24m shares. But insiders sold 1.11k shares worth CA$15k. In total, Lundin Mining insiders bought more than they sold over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Check out our latest analysis for Lundin Mining
Lundin Mining 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.
Insider Ownership Of Lundin Mining
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 0.7% of Lundin Mining shares, worth about CA$67m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Lundin Mining Insiders?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. Given that insiders also own a fair bit of Lundin Mining we think they are probably pretty confident of a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Lundin Mining. In terms of investment risks, we've identified 3 warning signs with Lundin Mining and understanding them should be part of your investment process.