Insider Spends AU$97k Buying More Shares In Cobre
Whilst it may not be a huge deal, we thought it was good to see that the Cobre Limited (ASX:CBE) Co-Founder & Executive Chairman, Martin Holland, recently bought AU$97k worth of stock, for AU$0.22 per share. Although the purchase is not a big one, increasing their shareholding by only 2.7%, it can be interpreted as a good sign.
Cobre Insider Transactions Over The Last Year
Notably, that recent purchase by Co-Founder & Executive Chairman Martin Holland was not the only time they bought Cobre shares this year. Earlier in the year, they paid AU$0.15 per share in a AU$125k purchase. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.23. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
While Cobre insiders bought shares during the last year, they didn't sell. They paid about AU$0.18 on average. To my mind it is good that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Check out our latest analysis for Cobre
Cobre is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Does Cobre 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 6.2% of Cobre shares, worth about AU$18m. 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 Cobre Insider Transactions Indicate?
It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Cobre insiders are well aligned, and that they may think the share price is too low. 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 Cobre has 2 warning signs and it would be unwise to ignore them.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.