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Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Legend Mining Limited (ASX:LEG), it sends a favourable message to the company's 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.
View our latest analysis for Legend Mining
The Last 12 Months Of Insider Transactions At Legend Mining
In the last twelve months, the biggest single purchase by an insider was when Executive Chairman Mark Wilson bought AU$126k worth of shares at a price of AU$0.017 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.011). Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
In the last twelve months Legend Mining insiders were buying shares, but not selling. The average buy price was around AU$0.018. This is nice to see since it implies that insiders might see value around current prices. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Legend Mining is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Does Legend Mining 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. Our data indicates that Legend Mining insiders own about AU$2.6m worth of shares (which is 8.2% of the company). We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We do generally prefer see higher levels of insider ownership.
What Might The Insider Transactions At Legend Mining Tell Us?
It doesn't really mean much that no insider has traded Legend Mining shares in the last quarter. However, our analysis of transactions over the last year is heartening. The transactions are fine but it'd be more encouraging if Legend Mining insiders bought more shares in the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example, Legend Mining has 3 warning signs (and 2 which don't sit too well with us) we think you should know about.