In a reassuring sign for investors, Newcrest Mining (ASX: NCM) Chairman Don Mercer has taken advantage of the company's battered share price to increase his holding in the company. In a disclosure to share market operator ASX (ASX: ASX) on Wednesday it was noted that Mr. Mercer has increased his indirect interest in the company by 5,000 shares.
At the time of Newcrest's 2012 Annual Report Mr. Mercer held 15,546 shares, before increasing that to 20,000 in May. This latest round of shares was purchased at $9.41 per share, not far from Newcrest's eight year low of $9.30 per share. Shares have since recovered around 18%.
It's positive for investors when key management have some 'skin in the game' and own shares. It helps to align their interests with shareholders and makes shareholders feel more comfortable with their intentions. Directors of companies Cochlear (ASX: COH) and Primary Health Care (ASX: PRY) have also taken advantage of lower share prices to increase their holdings this year.
Foolish takeaway
The timing of the Newcrest share purchase suggests that Mr. Mercer feels there is still value to be found in Newcrest and he is in the best position to know every facet of the company and its future prospects.
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More reading
- Newcrest Mining: bargain of the year of fool's gold?
- Miners drive market forward
- Gold bubble burst wipes out $180 billion
Motley Fool contributor Regan Pearson does not own shares in any companies mentioned in this article.
