We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Pure Gold Mining Inc. (CVE:PGM).
What Is Insider Selling?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. 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'.
View our latest analysis for Pure Gold Mining
The Last 12 Months Of Insider Transactions At Pure Gold Mining
The insider Eric Sprott made the biggest insider purchase in the last 12 months. That single transaction was for CA$10m worth of shares at a price of CA$1.05 each. We do like to see buying, but this purchase was made at well below the current price of CA$2.26. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
In the last twelve months insiders purchased 10.00m shares for CA$10m. On the other hand they divested 1.61m shares, for CA$2.9m. In total, Pure Gold Mining insiders bought more than they sold over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insiders at Pure Gold Mining Have Sold Stock Recently
The last three months saw significant insider selling at Pure Gold Mining. Specifically, insiders ditched CA$2.3m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Insider Ownership
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Pure Gold Mining insiders own 15% of the company, worth about CA$136m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Pure Gold Mining Insider Transactions Indicate?
Insiders haven't bought Pure Gold Mining stock in the last three months, but there was some selling. But we take heart from prior transactions. We are also comforted by the high levels of insider ownership. So the recent selling doesn't worry us. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Pure Gold Mining. For example - Pure Gold Mining has 4 warning signs we think you should be aware of.
Of course Pure Gold Mining may not be the best stock to buy. So you may wish to see this free collection of high quality 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, but not derivative transactions.
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This article by Simply Wall St is general in nature. 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.
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