Insiders Of Marimaca Copper Retain US$1.1m Of Investment Selling At Higher Prices

While it’s been a great week for Marimaca Copper Corp. (TSE:MARI) shareholders after stock gained 11%, they should consider it with a grain of salt. The fact that insiders chose to dispose of US$1.1m worth of stock in the past 12 months even though prices were relatively low could be indicative of some anticipated weakness.

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.

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The Last 12 Months Of Insider Transactions At Marimaca Copper

The President, Hayden Locke, made the biggest insider sale in the last 12 months. That single transaction was for CA$964k worth of shares at a price of CA$9.41 each. So it's clear an insider wanted to take some cash off the table, even below the current price of CA$12.40. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 19% of Hayden Locke's holding.

In total, Marimaca Copper insiders sold more than they bought over the last year. 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!

See our latest analysis for Marimaca Copper

I will like Marimaca Copper better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Does Marimaca Copper Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Marimaca Copper insiders own about CA$16m worth of shares. That equates to 1.2% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Marimaca Copper Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Marimaca Copper shares in the last quarter. Our analysis of Marimaca Copper 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. Case in point: We've spotted 2 warning signs for Marimaca Copper you should be aware of, and 1 of them is significant.

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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.

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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.