Santa Fe Minerals Insiders Land Bargain With Gains Of AU$677k

Insiders who bought Santa Fe Minerals Limited (ASX:SFM) in the last 12 months may probably not pay attention to the stock's recent 25% drop. Reason being, despite the recent loss, insiders original purchase value of AU$1.32m is now worth AU$2.00m.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

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Santa Fe Minerals Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Cesare Ceniviva bought AU$1.1m worth of shares at a price of AU$0.20 per share. That implies that an insider found the current price of AU$0.21 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. In this case we're pleased to report that the insider purchases were made at close to current prices.

Santa Fe Minerals insiders may have bought shares in the last year, but they didn't sell any. Their average price was about AU$0.14. To my mind it is good that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. 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!

View our latest analysis for Santa Fe Minerals

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).

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Insiders own 25% of Santa Fe Minerals shares, worth about AU$8.5m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Santa Fe Minerals Insiders?

The fact that there have been no Santa Fe Minerals insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. Insiders own shares in Santa Fe Minerals and we see no evidence to suggest they are worried about the future. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. At Simply Wall St, we've found that Santa Fe Minerals has 4 warning signs (3 are a bit concerning!) that deserve your attention before going any further with your analysis.

Of course Santa Fe Minerals 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.