Insider Traders Lose AU$238k As Freehill Mining Drops

Insiders who bought AU$322.0k worth of Freehill Mining Limited’s (ASX:FHS) stock at an average buy price of AU$0.0038 over the last year may be disappointed by the recent 33% decrease in the stock. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth AU$83.7k, which is not great.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At Freehill Mining

In the last twelve months, the biggest single purchase by an insider was when insider Gavin Ross bought AU$175k worth of shares at a price of AU$0.004 per share. That means that even when the share price was higher than AU$0.001 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

While Freehill Mining insiders bought shares during the last year, they didn’t sell. 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!

View our latest analysis for Freehill Mining

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Are Freehill Mining Insiders Buying Or Selling?

Non-Executive Chairman Benjamin Jarvis bought just AU$2.7k worth of shares in that time. That’s not much at all. Looking at the net result, we don’t think these recent trades shed much light on how insiders, as a group, are feeling about the company’s prospects.

Insider Ownership Of Freehill Mining

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. It appears that Freehill Mining insiders own 35% of the company, worth about AU$1.4m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Freehill Mining Insider Transactions Indicate?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. The net investment is not enough to encourage us much. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Freehill Mining and their transactions don’t cause us concern. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. For example, Freehill Mining has 4 warning signs (and 2 which are potentially serious) we think you should know about.

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 of direct interests only, but not derivative transactions or indirect interests.

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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.