Insiders who acquired CA$941.5k worth of NexMetals Mining Corp.'s (NASDAQ:NEXM) stock at an average price of CA$3.56 in the past 12 months may be dismayed by the recent 11% price decline. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth CA$587.4k, which is not great.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

The Last 12 Months Of Insider Transactions At NexMetals Mining

In the last twelve months, the biggest single purchase by an insider was when insider Mark Christensen bought US$392k worth of shares at a price of US$4.06 per share. That means that an insider was happy to buy shares at above the current price of US$2.22. 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 always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

NexMetals Mining insiders may have bought shares in the last year, but they didn't sell any. The average buy price was around US$3.56. I'd consider this a positive as it suggests insiders see value at around the current price. 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!

NexMetals Mining is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insiders At NexMetals Mining Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at NexMetals Mining. In total, insiders bought US$216k worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data suggests NexMetals Mining insiders own 3.0% of the company, worth about US$2.4m. We prefer to see high levels of insider ownership.

So What Do The NexMetals Mining Insider Transactions Indicate?

The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that NexMetals Mining insiders are reasonably well aligned, and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing NexMetals Mining. To help with this, we've discovered 5 warning signs (3 shouldn't be ignored!) that you ought to be aware of before buying any shares in NexMetals Mining.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.

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.