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We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Cliffmont Resources Ltd. (CVE:CMO.H).
What Is Insider Buying?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'
View our latest analysis for Cliffmont Resources
The Last 12 Months Of Insider Transactions At Cliffmont Resources
Over the last year, we can see that the biggest insider purchase was by President Jeffery Tindale for CA$119k worth of shares, at about CA$0.074 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$0.07). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing 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. The only individual insider to buy over the last year was Jeffery Tindale.
The chart below shows insider transactions (by 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!
Cliffmont Resources is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Does Cliffmont Resources Boast High 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 31% of Cliffmont Resources shares, worth about CA$190k. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.