Have Insiders Been Buying Australia United Mining Limited (ASX:AYM) Shares This Year?

It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Australia United Mining Limited (ASX:AYM), you may well want to know whether insiders have been buying or selling.

What Is Insider Selling?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.

Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

Check out our latest analysis for Australia United Mining

The Last 12 Months Of Insider Transactions At Australia United Mining

Over the last year, we can see that the biggest insider purchase was by insider Chao Ma for AU$200k worth of shares, at about AU$0.006 per share. We do like to see buying, but this purchase was made at well below the current price of AU$0.009. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Happily, we note that in the last year insiders paid AU$239k for 38.23m shares. But insiders sold 33.33m shares worth AU$200k. In total, Australia United Mining insiders bought more than they sold over the last year. 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!

insider-trading-volumeinsider-trading-volume
insider-trading-volume

Australia United Mining is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insiders at Australia United Mining Have Bought Stock Recently

There was some insider buying at Australia United Mining over the last quarter. Non-Executive Director Jia Yu bought AU$39k worth of shares in that time. We like it when there are only buyers, and no sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

Insider Ownership of Australia United Mining

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. Australia United Mining insiders own about AU$6.6m worth of shares (which is 40% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Australia United Mining Tell Us?

We note a that there has been a bit of insider buying recently (but no selling). The net investment is not enough to encourage us much. However, our analysis of transactions over the last year is heartening. Judging from their transactions, and high insider ownership, Australia United Mining insiders feel good about the company's future. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To that end, you should learn about the 3 warning signs we've spotted with Australia United Mining (including 2 which are concerning).

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.

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

Matt Earle

Matthew Earle is the Founder of MiningFeeds. In 2005, Matt founded MiningNerds.com to provide data and information to the mining investment community. This site was merged with Highgrade Review to form MiningFeeds. Matt has a B.Sc. degree with a minor in geology from the University of Toronto.

By Matt Earle

Matthew Earle is the Founder of MiningFeeds. In 2005, Matt founded MiningNerds.com to provide data and information to the mining investment community. This site was merged with Highgrade Review to form MiningFeeds. Matt has a B.Sc. degree with a minor in geology from the University of Toronto.

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