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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 Lindian Resources Limited's (ASX:LIN) case, it's fantastic news for shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
See our latest analysis for Lindian Resources
The Last 12 Months Of Insider Transactions At Lindian Resources
In the last twelve months, the biggest single purchase by an insider was when Executive Chairman Asimwe Matungwa Kabunga bought AU$500k worth of shares at a price of AU$0.26 per share. That means that even when the share price was higher than AU$0.11 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
In the last twelve months Lindian Resources insiders were buying shares, but not selling. 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!
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).
Does Lindian Resources Boast High 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. We usually like to see fairly high levels of insider ownership. It appears that Lindian Resources insiders own 35% of the company, worth about AU$45m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Lindian Resources Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Lindian Resources shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Overall we don't see anything to make us think Lindian Resources insiders are doubting the company, and they do own shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 4 warning signs for Lindian Resources you should be aware of, and 3 of these are a bit concerning.