Don’t Ignore The Insider Selling In Rusoro Mining

Anyone interested in Rusoro Mining Ltd. (CVE:RML) should probably be aware that the Independent Director, Anthony Beruschi, recently divested CA$293k worth of shares in the company, at an average price of CA$1.30 each. On the bright side, that sale was only 0.9% of their holding, so we doubt it’s very meaningful, on its own.

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The Last 12 Months Of Insider Transactions At Rusoro Mining

In fact, the recent sale by Independent Director Anthony Beruschi was not their only sale of Rusoro Mining shares this year. Earlier in the year, they fetched CA$1.20 per share in a -CA$348k sale. That means that even when the share price was below the current price of CA$1.30, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can’t be sure if it does mean insiders think the shares are fully valued, so it’s only a weak sign. It is worth noting that this sale was only 1.2% of Anthony Beruschi’s holding.

In the last twelve months insiders purchased 161.50k shares for CA$123k. On the other hand they divested 1.52m shares, for CA$1.6m. Over the last year we saw more insider selling of Rusoro Mining shares, than buying. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart 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 Rusoro Mining

I will like Rusoro Mining better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Does Rusoro Mining Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Rusoro Mining insiders own 23% of the company, currently worth about CA$191m 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.

What Might The Insider Transactions At Rusoro Mining Tell Us?

The stark truth for Rusoro Mining is that there has been more insider selling than insider buying in the last three months. Despite some insider buying, the longer term picture doesn’t make us feel much more positive. The company boasts high insider ownership, but we’re a little hesitant, given the history of share sales. 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, Rusoro Mining has 5 warning signs (and 4 which don’t sit too well with us) we think you should know about.

Of course Rusoro Mining may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.