Read This Before Selling Cohiba Minerals Limited (ASX:CHK) Shares

By

Simply Wall St

Published

December 20, 2020

We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

See our latest analysis for Cohiba Minerals

The Last 12 Months Of Insider Transactions At Cohiba Minerals

In the last twelve months, the biggest single purchase by an insider was when Executive Chairman Mordechai Benedikt bought AU$178k worth of shares at a price of AU$0.02 per share. That means that an insider was happy to buy shares at around the current price of AU$0.021. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. In this case we're pleased to report that the insider purchases were made at close to current prices.

In the last twelve months Cohiba Minerals insiders were buying shares, but not selling. The average buy price was around AU$0.011. It is certainly positive to see that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

ASX:CHK Insider Trading Volume December 20th 2020

Cohiba Minerals Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Cohiba Minerals. Not only was there no selling that we can see, but they collectively bought AU$228k worth of shares. This is a positive in our book as it implies some confidence.

Insider Ownership of Cohiba Minerals

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data indicates that Cohiba Minerals insiders own about AU$3.8m worth of shares (which is 13% of the company). But they may have an indirect interest through a corporate structure that we haven't picked up on. We do generally prefer see higher levels of insider ownership.

So What Do The Cohiba Minerals Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Cohiba Minerals insiders are reasonably well aligned, and optimistic for the future.

Insider Trading Volume

Shares soldShares bought0–3months3–6months6–9months9–12months00005,000,000 sharesapprox. AU$80.0k1034,021,248 sharesapprox. AU$1.0m1012,393,800 sharesapprox. AU$215.9k200

Recent Insider Transactions

ASX:CHKRecent Insider Transactions by Companies or Individuals

Date	Value	Name	Entity	Role	Shares	Max Price
11 May 21	BuyAU$79,994	Mordechai Benedikt	Individual		5,000,000	AU$0.016
15 Mar 21	BuyAU$218,617	Mordechai Benedikt	Individual		12,863,737	AU$0.017
11 Jan 21	BuyAU$303,164	Mordechai Benedikt	Individual		6,896,896	AU$0.045
07 Jan 21	BuyAU$74,283	Mordechai Benedikt	Individual		2,000,000	AU$0.037
05 Jan 21	BuyAU$306,035	Mordechai Benedikt	Individual		12,260,615	AU$0.026
04 Dec 20	BuyAU$49,999	Nochum Labkowski	Individual		3,125,000	AU$0.016
03 Dec 20	BuyAU$177,569	Mordechai Benedikt	Individual		9,268,800	AU$0.02