Yahoo Finance As Hummingbird Resources PLC's (LON:HUM) market cap increased UK£2.6m, insiders who bought last year may be reflecting on buying more
Insiders who bought Hummingbird Resources PLC (LON:HUM) stock in the last 12 months were richly rewarded last week. The company's market value increased by UK£2.6m as a result of the stock's 10% gain over the same period. Put another way, the original US$156k acquisition is now worth US$163k.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
View our latest analysis for Hummingbird Resources
Hummingbird Resources Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Independent Non Executive Director Stephen Betts bought UK£59k worth of shares at a price of UK£0.059 per share. We do like to see buying, but this purchase was made at well below the current price of UK£0.069. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
While Hummingbird Resources insiders bought shares during the last year, they didn't sell. The average buy price was around UK£0.065. Although they bought at below the recent share price, it is good to see that insiders are willing to invest in the company. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Hummingbird Resources is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Hummingbird Resources Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at Hummingbird Resources. Not only was there no selling that we can see, but they collectively bought UK£126k worth of shares. That shows some optimism about the company's future.
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. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data suggests Hummingbird Resources insiders own 2.2% of the company, worth about UK£592k. However, it's possible that insiders might have an indirect interest through a more complex structure. We prefer to see high levels of insider ownership.
So What Do The Hummingbird Resources Insider Transactions Indicate?
The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Hummingbird Resources insiders are reasonably well aligned, and optimistic for the future. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. While conducting our analysis, we found that Hummingbird Resources has 3 warning signs and it would be unwise to ignore them.
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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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.
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