PLY), just spent C$150,000 to buy 9.4% more shares

Investors interested in Playfair Mining Ltd. (CVE: PLEA) should certainly note that insider Alan Brimacombe recently paid C$0.075 per share to buy C$150,000 worth of stock. While a very decent buy in our eyes, it was proportionately a bit modest, increasing their stake by just 9.4%.

Check out our latest analysis for Playfair Mining

The last 12 months of insider trading at Playfair Mining

In fact, the recent purchase by Alan Brimacombe was the largest purchase of Playfair Mining shares made by an insider in the past twelve months, according to our records. Clearly, an insider wanted to buy, even at a price above the current stock price (i.e. C$0.065). Although their perspective has changed since the purchase, it at least suggests that they have confidence in the future of the company. In our view, the price an insider pays for a stock is very important. It is generally more encouraging if they paid above the current price, as this suggests that they perceived value even at higher levels.

While Playfair Mining insiders have bought shares over the past year, they haven’t sold. The average purchase price was approximately C$0.098. I would view this as a positive as it suggests insiders are seeing value around the current price. The chart below shows insider trading (by companies and individuals) over the past year. If you click on the chart, you can see all individual trades including stock price, individual and date!

volume-of-insider-trading

Playfair Mining isn’t the only stock insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider buying, might be just the ticket.

Does Playfair Mining boast of high insider ownership?

For an ordinary shareholder, it is worth checking how many shares are held by company insiders. I think it’s a good sign if insiders have a significant number of shares in the company. Insiders of Playfair Mining hold approximately C$2.0 million worth of stock. This equals 28% of the business. This level of insider ownership is good, but just short of being particularly noteworthy. This certainly suggests a reasonable degree of alignment.

So what do Playfair Mining’s insider trades indicate?

The recent insider buying is encouraging. We also rely on the longer-term picture of insider trading. However, we note that the company has not made a profit in the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest that Playfair Mining insiders are well aligned and may believe the stock price is too low. In addition to knowing the insider trading going on, it pays to identify the risks that Playfair Mining faces. When we did our research, we found 3 warning signs for Playfair Mining (2 don’t sit very well with us!) which we think deserve your full attention.

If you’d rather check out another company – one with potentially superior finances – then don’t miss this free list of attractive companies, which have a high return on equity and low debt.

For the purposes of this article, insiders are persons who report their transactions to the relevant regulatory body. We currently record open market transactions and private dispositions, but not derivative transactions.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.