Jaguar Mining Inc. (TSE:JAG) Insiders Increased Their Holdings

It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Jaguar Mining Inc. (TSE:JAG).

What Is Insider Buying?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.

We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

See our latest analysis for Jaguar Mining

The Last 12 Months Of Insider Transactions At Jaguar Mining

The Chief Financial Officer Hashim Ahmed made the biggest insider purchase in the last 12 months. That single transaction was for CA$265k worth of shares at a price of CA$7.04 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$6.88). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

In the last twelve months Jaguar Mining insiders were buying shares, but not selling. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

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

Insider Ownership

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Jaguar Mining insiders own about CA$239m worth of shares (which is 49% 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.

So What Do The Jaguar Mining Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Jaguar Mining shares in the last quarter. However, our analysis of transactions over the last year is heartening. Judging from their transactions, and high insider ownership, Jaguar Mining insiders feel good about the company's future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Jaguar Mining. While conducting our analysis, we found that Jaguar Mining has 2 warning signs and it would be unwise to ignore these.

But note: Jaguar Mining 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, 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.

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