Investors who take an interest in Collective Mining Ltd. (TSE:CNL) should definitely note that insider Pasquale DiCapo recently paid CA$5.00 per share to buy CA$250k worth of the stock. However, it only increased shareholding by a small percentage, and it wasn't a huge purchase by absolute value, either.

Check out our latest analysis for Collective Mining

The Last 12 Months Of Insider Transactions At Collective Mining

In fact, the recent purchase by Pasquale DiCapo was the biggest purchase of Collective Mining shares made by an insider individual in the last twelve months, according to our records. That implies that an insider found the current price of CA$5.22 per share to be enticing. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. The good news for Collective Mining share holders is that insiders were buying at near the current price.

Overall, Collective Mining insiders were net buyers during the last year. The average buy price was around CA$4.30. We don't deny that it is nice to see insiders buying stock in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. The chart below shows insider transactions (by companies and individuals) over the last year. 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 undervalued small cap companies that insiders are buying.

Insider Ownership Of Collective Mining

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 33% of Collective Mining shares, worth about CA$117m. 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 Do The Collective Mining Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Collective Mining. Looks promising! 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. To that end, you should learn about the 3 warning signs we've spotted with Collective Mining (including 1 which is concerning).

But note: Collective 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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.