We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Nighthawk Gold Corp. (TSE:NHK), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. 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 logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
Nighthawk Gold Insider Transactions Over The Last Year
Notably, that recent sale by Director Luc Lessard was not the only time they sold Nighthawk Gold shares this year. They previously made an even bigger sale of -CA$92.5k worth of shares at a price of CA$0.70 per share. So we know that an insider sold shares at around the present share price of CA$0.60. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).
Over the last year, we can see that insiders have bought 830k shares worth CA$330k. On the other hand they divested 132k shares, for CA$92k. In the last twelve months there was more buying than selling by Nighthawk Gold insiders. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Nighthawk Gold 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.
Nighthawk Gold Insiders Bought Stock Recently
There has been significantly more insider buying, than selling, at Nighthawk Gold, over the last three months. In total, six insiders bought CA$186k worth of shares in that time. But Luc Lessard sold shares worth CA$92k. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. From looking at our data, insiders own CA$4.2m worth of Nighthawk Gold stock, about 3.2% of the company. I generally like to see higher levels of ownership.
What Might The Insider Transactions At Nighthawk Gold Tell Us?
It is good to see recent purchasing. 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. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Nighthawk Gold stock. Of course, the future is what matters most. So if you are interested in Nighthawk Gold, you should check out this free report on analyst forecasts for the company.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.
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If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.