Don't Ignore The Insider Selling In First Majestic Silver

We wouldn't blame First Majestic Silver Corp. (TSE:AG) shareholders if they were a little worried about the fact that Keith Neumeyer, the Founder recently netted about CA$750k selling shares at an average price of CA$30.00. However, that sale only accounted for 0.5% of their holding, so arguably it doesn't say much about their conviction.

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The Last 12 Months Of Insider Transactions At First Majestic Silver

Notably, that recent sale by Founder Keith Neumeyer was not the only time they sold First Majestic Silver shares this year. They previously made an even bigger sale of -CA$4.6m worth of shares at a price of CA$20.34 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of CA$29.07. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 5.1% of Keith Neumeyer's holding.

In the last twelve months insiders purchased 12.47k shares for CA$240k. But insiders sold 629.45k shares worth CA$17m. Over the last year we saw more insider selling of First Majestic Silver shares, than buying. 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!

See our latest analysis for First Majestic Silver

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Does First Majestic Silver 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. We usually like to see fairly high levels of insider ownership. First Majestic Silver insiders own about CA$154m worth of shares (which is 1.1% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At First Majestic Silver Tell Us?

Insiders haven't bought First Majestic Silver stock in the last three months, but there was some selling. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But since First Majestic Silver is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. While conducting our analysis, we found that First Majestic Silver has 1 warning sign and it would be unwise to ignore it.

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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.