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Some of the losses seen by insiders who purchased CA$200.0k worth of Richmond Minerals Inc. (CVE:RMD) shares over the past year were recovered after the stock increased by 25% over the past week. The purchase, however, has proven to be a pricey bet, with losses currently totalling CA$100k.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for Richmond Minerals
Richmond Minerals Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by CFO & Director Philip Chong for CA$200k worth of shares, at about CA$0.05 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$0.025). 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. In our view, the price an insider pays for shares is very important. 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 Philip Chong.
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 Of Richmond Minerals
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. It appears that Richmond Minerals insiders own 30% of the company, worth about CA$217k. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Richmond Minerals Tell Us?
The fact that there have been no Richmond Minerals insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Richmond Minerals and we see no evidence to suggest they are worried about the future. 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. At Simply Wall St, we've found that Richmond Minerals has 5 warning signs (4 shouldn't be ignored!) that deserve your attention before going any further with your analysis.