Insiders At Kumba Iron Ore Sold R14m In Stock, Alluding To Potential Weakness

Many Kumba Iron Ore Limited (JSE:KIO) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

Kumba Iron Ore Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Themba Mkhwanazi, sold R11m worth of shares at a price of R370 per share. So we know that an insider sold shares at around the present share price of R351. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

In the last year Kumba Iron Ore insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

View our latest analysis for Kumba Iron Ore

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Does Kumba Iron Ore Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data suggests Kumba Iron Ore insiders own 0.05% of the company, worth about R60m. I generally like to see higher levels of ownership.

So What Do The Kumba Iron Ore Insider Transactions Indicate?

The fact that there have been no Kumba Iron Ore insider transactions recently certainly doesn't bother us. Our analysis of Kumba Iron Ore insider transactions leaves us cautious. The modest level of insider ownership is, at least, some comfort. 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. To help with this, we've discovered 2 warning signs (1 makes us a bit uncomfortable!) that you ought to be aware of before buying any shares in Kumba Iron Ore.

Of course Kumba Iron Ore 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 of direct interests only, but not derivative transactions or indirect interests.

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.