Mount Ridley Mines Limited (ASX:MRD) insiders profited after buying shares worth A$1.0m last year, current gains stand at A$1.7m

Mount Ridley Mines Limited (ASX:MRD) Insiders who have acquired stocks in the past 12 months can probably afford to ignore the recent 13% drop in the stock price. After factoring in the recent loss, the A$1.0m shares they bought are now worth A$2.7m, indicating that their investment has generated a positive return.

While we would never suggest that investors base their decisions solely on what a company’s directors have done, we would consider it foolish to completely ignore insider trading.

Check out our latest analysis for Mount Ridley Mines

Mount Ridley Mines Insider Trading Over the Past Year

Over the past year, we can see that the largest insider buy was made by insider Gavin Argyle for AU$591,000 of shares, at around AU$0.0075 per share. This means that an insider was happy to buy shares above the current price of AU$0.007. Although their perspective has changed since the purchase, it at least suggests that they have confidence in the future of the company. In our view, the price an insider pays for a stock is very important. It is generally more encouraging if they paid above the current price, as this suggests that they perceived value even at higher levels.

While Mount Ridley Mines insiders have bought shares over the past year, they haven’t sold. They paid around AU$0.0027 on average. We don’t deny that it’s nice to see insiders buying shares of the company. However, you should keep in mind that they bought when the stock price was significantly lower than today’s levels. The chart below shows insider trading (by companies and individuals) over the past year. If you want to know exactly who sold, how much and when, just click on the chart below!

ASX: MRD Insider Trading Volume May 13, 2022

Mount Ridley Mines isn’t the only stock insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider buying, might be just the ticket.

Does Mount Ridley Mines boast of being owned by insiders?

For an ordinary shareholder, it is worth checking how many shares are held by company insiders. High insider participation often makes company management more concerned with the interests of shareholders. Mount Ridley Mines insiders hold approximately A$11 million worth of shares. This equals 27% of the business. While this is a high but not exceptional level of insider ownership, it suffices to indicate some alignment between management and small shareholders.

So what does this data suggest about Mount Ridley Mines insiders?

It doesn’t mean much that no insider traded shares of Mount Ridley Mines in the last quarter. On a more positive note, last year’s transactions are encouraging. Overall, we see nothing to suggest that Mount Ridley Mines insiders doubt the company, and they own stock. So these insider trades can help us build a thesis on the stock, but it’s also helpful to know the risks this company faces. At Simply Wall St, we found that Mount Ridley Mines has 4 warning signs (1 does not really suit us!) which deserve your attention before going further in your analysis.

But note: Mount Ridley Mines may not be the best stock to buy. So take a look at this free list of interesting companies with high ROE and low debt.

For the purposes of this article, insiders are persons who report their transactions to the relevant regulatory body. We currently record open market transactions and private dispositions, but not derivative transactions.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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