Mogotes Metals Insider Sellers Vindicated After 11% Drop

Insiders at Mogotes Metals Inc. (CVE:MOG) sold CA$569k worth of stock at an average price of CA$0.52 a share over the past year, making the most of their investment. The company’s market worth decreased by CA$37m over the past week after the stock price dropped 11%, although insiders were able to minimize their losses

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

We’ve found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

Mogotes Metals Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Independent Non-Executive Chairman, Peter Mullens, sold CA$309k worth of shares at a price of CA$0.53 per share. That means that even when the share price was below the current price of CA$0.57, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it’s only a weak signal. This single sale was just 14% of Peter Mullens’s stake. The only individual insider seller over the last year was Peter Mullens.

Peter Mullens divested 1.10m shares over the last 12 months at an average price of CA$0.52. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Check out our latest analysis for Mogotes Metals

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Insiders At Mogotes Metals Have Sold Stock Recently

The last quarter saw substantial insider selling of Mogotes Metals shares. In total, Independent Non-Executive Chairman Peter Mullens dumped CA$569k worth of shares in that time, and we didn’t record any purchases whatsoever. In light of this it’s hard to argue that all the insiders think that the shares are a bargain.

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. Our data suggests Mogotes Metals insiders own 1.1% of the company, worth about CA$3.3m. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We prefer to see high levels of insider ownership.

So What Do The Mogotes Metals Insider Transactions Indicate?

An insider hasn’t bought Mogotes Metals stock in the last three months, but there was some selling. And there weren’t any purchases to give us comfort, over the last year. When you consider that most companies have higher levels of insider ownership, we’re a little wary. We’d certainly practice some caution before buying! In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing Mogotes Metals. To help with this, we’ve discovered 5 warning signs (4 make us uncomfortable!) that you ought to be aware of before buying any shares in Mogotes Metals.

But note: Mogotes Metals may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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 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.

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.