Insiders Of Meridian Mining Retain US$4.7m Of Investment Selling At Higher Prices
While Meridian Mining Plc (TSE:MNO) shareholders have had a good week with the stock up 24%, they shouldn't let their guards down. Even though stock prices were relatively low, insiders elected to sell US$4.7m worth of stock in the last year, which could indicate some expected downturn.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At Meridian Mining
In the last twelve months, the biggest single sale by an insider was when the insider, Henry Maxey, sold CA$4.7m worth of shares at a price of CA$1.18 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of CA$2.32. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower 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. It is worth noting that this sale was only 9.6% of Henry Maxey's holding. The only individual insider seller over the last year was Henry Maxey.
The chart below shows insider transactions (by companies and individuals) over the last year. 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 Meridian Mining
I will like Meridian Mining 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 Meridian Mining Boast High Insider Ownership?
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Meridian Mining insiders own about CA$107m worth of shares. That equates to 9.4% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About Meridian Mining Insiders?
It doesn't really mean much that no insider has traded Meridian Mining shares in the last quarter. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Meridian Mining insiders selling. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 3 warning signs for Meridian Mining (of which 2 are significant!) you should know about.
Of course Meridian 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 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.