Yahoo Finance Should You Take Comfort From Insider Transactions At Griffin Mining Limited (LON:GFM)?
It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Griffin Mining Limited (LON:GFM).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
See our latest analysis for Griffin Mining
Griffin Mining Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Director Adam Usdan for UK£53k worth of shares, at about UK£0.88 per share. That means that an insider was happy to buy shares at around the current price of UK£0.92. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the Griffin Mining insider decided to buy shares at close to current prices. The only individual insider to buy over the last year was Adam Usdan.
Adam Usdan purchased 250k shares over the year. The average price per share was UK£0.93. You can see a visual depiction of insider transactions (by 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!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 27% of Griffin Mining shares, worth about UK£43m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Griffin Mining Tell Us?
It doesn't really mean much that no insider has traded Griffin Mining shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think Griffin Mining insiders are doubting the company, and they do own shares. Of course, the future is what matters most. So if you are interested in Griffin Mining, you should check out this free report on analyst forecasts for the company.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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, but not derivative transactions.
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If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
