Rugby Mining Limited (CVE:RUG) Insiders Increased Their Holdings

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We often see insiders buying up shares in companies that perform well over the long term. 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 before you buy or sell Rugby Mining Limited (CVE:RUG), you may well want to know whether insiders have been buying or selling.

Do Insider Transactions Matter?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. 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 it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'

See our latest analysis for Rugby Mining

The Last 12 Months Of Insider Transactions At Rugby Mining

Over the last year, we can see that the biggest insider purchase was by Chairman of the Board Bryce Roxburgh for CA$152k worth of shares, at about CA$0.18 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$0.14). Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay 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.

Happily, we note that in the last year insiders bought 1.2m shares for a total of CA$216k. While Rugby Mining insiders bought shares last year, they didn't sell. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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

Insiders at Rugby Mining Have Bought Stock Recently

It's good to see that Rugby Mining insiders have made notable investments in the company's shares. In total, insiders bought CA$215k worth of shares in that time, and we didn't record any sales whatsoever. That shows some optimism about the company's future.

Does Rugby Mining Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company 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. Insiders own 29% of Rugby Mining shares, worth about CA$3.5m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Rugby Mining Insider Transactions Indicate?

The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest Rugby Mining insiders are well aligned, and that they may think the share price is too low. Along with insider transactions, I recommend checking if Rugby Mining is growing revenue. This free chart of historic revenue and earnings should make that easy.

Of course Rugby 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 aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.