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 we'll take a look at whether insiders have been buying or selling shares in Pure Gold Mining Inc. (CVE:PGM).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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'.
Pure Gold Mining Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when insider Eric Sprott bought CA$10m worth of shares at a price of CA$1.05 per share. Even though the purchase was made at a significantly lower price than the recent price (CA$2.30), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
In the last twelve months insiders purchased 10.00m shares for CA$10m. But they sold 490.20k shares for CA$1.2m. In total, Pure Gold Mining insiders bought more than they sold over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Pure Gold Mining is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Pure Gold Mining Have Sold Stock Recently
The last quarter saw substantial insider selling of Pure Gold Mining shares. In total, insiders sold CA$1.2m 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 of Pure Gold Mining
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It's great to see that Pure Gold Mining insiders own 15% of the company, worth about CA$140m. 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 Do The Pure Gold Mining Insider Transactions Indicate?
Insiders sold stock recently, but they haven't been buying. But we take heart from prior transactions. And insider ownership remains quite considerable. So we're not too bothered by recent selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Pure Gold Mining. You'd be interested to know, that we found 3 warning signs for Pure Gold Mining and we suggest you have a look.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.
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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