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Whilst it may not be a huge deal, we thought it was good to see that the Chilwa Minerals Limited (ASX:CHW) Non-Executive Director, Manuel António da Fonseca da Mota, recently bought AU$100k worth of stock, for AU$0.86 per share. While we're hesitant to get too excited about a purchase of that size, we do note it increased their holding by a solid 16%.
Check out our latest analysis for Chilwa Minerals
The Last 12 Months Of Insider Transactions At Chilwa Minerals
Over the last year, we can see that the biggest insider purchase was by insider Basilio Paparone for AU$219k worth of shares, at about AU$0.28 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.80. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
In the last twelve months Chilwa Minerals insiders were buying shares, but not selling. Their average price was about AU$0.25. To my mind it is good that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
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. 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 21% of Chilwa Minerals shares, worth about AU$12m. 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 Do The Chilwa Minerals Insider Transactions Indicate?
The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. Insiders likely see value in Chilwa Minerals shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Chilwa Minerals. To help with this, we've discovered 2 warning signs (1 is a bit concerning!) that you ought to be aware of before buying any shares in Chilwa Minerals.