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When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Chilwa Minerals Limited's (ASX:CHW) instance, it's good 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, we do think it is perfectly logical to keep tabs on what insiders are doing.
View 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. We do like to see buying, but this purchase was made at well below the current price of AU$0.98. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
While Chilwa Minerals insiders bought shares during the last year, they didn't sell. They paid about AU$0.18 on average. It is certainly positive to see 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!
Chilwa Minerals 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
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Chilwa Minerals insiders own about AU$17m worth of shares. That equates to 25% 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 Does This Data Suggest About Chilwa Minerals Insiders?
There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. Overall we don't see anything to make us think Chilwa Minerals insiders are doubting the company, and they do own shares. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Our analysis shows 3 warning signs for Chilwa Minerals (1 is significant!) and we strongly recommend you look at these before investing.