Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Jubilee Metals Group PLC (LON:JLP), it sends a favourable message to the company’s 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.
Check out our latest analysis for Jubilee Metals Group
The CEO & Executive Director Leon Coetzer made the biggest insider purchase in the last 12 months. That single transaction was for UK£40k worth of shares at a price of UK£0.064 each. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being UK£0.034). Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Jubilee Metals Group insiders may have bought shares in the last year, but they didn’t sell any. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
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 Jubilee Metals Group insiders own 2.0% of the company, worth about UK£2.0m. However, it’s possible that insiders might have an indirect interest through a more complex structure. We prefer to see high levels of insider ownership.
The fact that there have been no Jubilee Metals Group insider transactions recently certainly doesn’t bother us. But insiders have shown more of an appetite for the stock, over the last year. While we have no worries about the insider transactions, we’d be more comfortable if they owned more Jubilee Metals Group stock. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. Case in point: We’ve spotted 3 warning signs for Jubilee Metals Group you should be aware of.
