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Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Black Mountain Gold USA Corp. (CVE:BMG), it sends a favourable message to the company's shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Black Mountain Gold USA Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Director Farhad Abasov bought CA$200k worth of shares at a price of CA$0.08 per share. Even though the purchase was made at a significantly lower price than the recent price (CA$0.31), we still think insider buying is a positive. 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.
While Black Mountain Gold USA insiders bought shares during the last year, they didn't sell. The average buy price was around CA$0.13. 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. 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!
Black Mountain Gold USA is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Black Mountain Gold USA Insiders Bought Stock Recently
Over the last three months, we've seen a bit of insider buying at Black Mountain Gold USA. President Graham Harris purchased CA$31k worth of shares in that period. It's good to see the insider buying, as well as the lack of recent sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.
For a common shareholder, it is worth checking how many shares are held by company insiders. 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 Black Mountain Gold USA insiders own 41% of the company, worth about CA$3.9m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About Black Mountain Gold USA Insiders?
We note a that there has been a bit of insider buying recently (but no selling). That said, the purchases were not large. On a brighter note, the transactions over the last year are encouraging. It would be great to see more insider buying, but overall it seems like Black Mountain Gold USA insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 5 warning signs for Black Mountain Gold USA (4 are significant!) and we strongly recommend you look at these before investing.
But note: Black Mountain Gold USA may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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.
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.
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