A number of insiders bought Native Mineral Resources Holdings Limited (ASX:NMR) stock last year, which is great news for shareholders




  • In Business
  • 2023-02-06 03:18:31Z
  • By Simply Wall St.
 

It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Native Mineral Resources Holdings Limited's (ASX:NMR) case, it's fantastic 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 would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Native Mineral Resources Holdings

The Last 12 Months Of Insider Transactions At Native Mineral Resources Holdings

The Non-Executive & Independent Director Philip Gardner made the biggest insider purchase in the last 12 months. That single transaction was for AU$329k worth of shares at a price of AU$0.22 each. That means that an insider was happy to buy shares at above the current price of AU$0.08. 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. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Native Mineral Resources Holdings insiders may have bought shares in the last year, but they didn't sell any. The average buy price was around AU$0.18. I'd consider this a positive as it suggests insiders see value at around the current price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Native Mineral Resources Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Are Native Mineral Resources Holdings Insiders Buying Or Selling?

We've only seen a tiny insider purchase valued at AU$1.9k, in the last three months. Overall, we don't think these recent trades are particularly informative, one way or the other.

Insider Ownership

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's great to see that Native Mineral Resources Holdings insiders own 56% of the company, worth about AU$5.3m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Native Mineral Resources Holdings Insider Transactions Indicate?

Our data shows a little insider buying, but no selling, in the last three months. The net investment is not enough to encourage us much. However, our analysis of transactions over the last year is heartening. Judging from their transactions, and high insider ownership, Native Mineral Resources Holdings insiders feel good about the company's future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To help with this, we've discovered 6 warning signs (4 are potentially serious!) that you ought to be aware of before buying any shares in Native Mineral Resources Holdings.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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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