When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Great Southern Mining Limited’s (ASX:GSN) instance, it’s good news for shareholders.
Although we don’t think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
View our latest analysis for Great Southern Mining
Notably, that recent purchase by Joseph Pinto is the biggest insider purchase of Great Southern Mining shares that we’ve seen in the last year. That means that an insider was happy to buy shares at above the current price of AU$0.016. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it’s very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels. Notably Joseph Pinto was also the biggest seller.
In the last twelve months insiders purchased 58.61m shares for AU$1.1m. On the other hand they divested 17.69m shares, for AU$366k. In total, Great Southern Mining insiders bought more than they sold over the last year. They paid about AU$0.019 on average. This is nice to see since it implies that insiders might see value around current prices. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
Great Southern Mining is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
At Great Southern Mining,over the last quarter, we have observed quite a lot more insider buying than insider selling. We can see that insider Joseph Pinto paid AU$1.0m for shares in the company. On the other hand, insider Joseph Pinto netted AU$366k by selling. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.
Many investors like to check how much of a company is owned by insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Great Southern Mining insiders own 50% of the company, currently worth about AU$6.8m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
