In the last year, multiple insiders have substantially increased their holdings of Lundin Mining Corporation (TSE:LUN) stock, indicating that insiders’ optimism about the company’s prospects has increased.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Lundin Mining Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Lead Independent Director Charles Ashley Heppenstall for CA$1.0m worth of shares, at about CA$10.09 per share. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being CA$8.92). 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. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. We note that Charles Ashley Heppenstall was both the biggest buyer and the biggest seller.
Happily, we note that in the last year insiders paid CA$3.3m for 406.92k shares. But insiders sold 202.83k shares worth CA$2.3m. Overall, Lundin Mining insiders were net buyers during the last year. The average buy price was around CA$8.07. It’s great to see insiders putting their own cash into the company’s stock, albeit at below the recent share price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insider Ownership Of Lundin Mining
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It appears that Lundin Mining insiders own 0.3% of the company, worth about CA$24m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Lundin Mining Insider Transactions Indicate?
The fact that there have been no Lundin Mining insider transactions recently certainly doesn’t bother us. However, our analysis of transactions over the last year is heartening. Overall we don’t see anything to make us think Lundin Mining 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. At Simply Wall St, we’ve found that Lundin Mining has 4 warning signs (1 shouldn’t be ignored!) that deserve your attention before going any further with your analysis.
Of course Lundin Mining may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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