Yahoo Finance Reunion Gold Corporation (CVE:RGD) up 17%, but insiders are still down 11% after purchasing CA$1.5m of stock last year
Some of the losses seen by insiders who purchased CA$1.5m worth of Reunion Gold Corporation (CVE:RGD) shares over the past year were recovered after the stock increased by 17% over the past week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled CA$161k since the time of purchase.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
See our latest analysis for Reunion Gold
The Last 12 Months Of Insider Transactions At Reunion Gold
In fact, the recent purchase by Executive Chairman David Fennell was not their only acquisition of Reunion Gold shares this year. Earlier in the year, they paid CA$0.065 per share in a CA$1.0m purchase. That implies that an insider found the current price of CA$0.07 per share to be enticing. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for Reunion Gold share holders is that insiders were buying at near the current price.
While Reunion Gold insiders bought shares during the last year, they didn't sell. The average buy price was around CA$0.079. These transactions suggest that insiders have considered the current price attractive. 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insiders at Reunion Gold Have Bought Stock Recently
It's good to see that Reunion Gold insiders have made notable investments in the company's shares. Executive Chairman David Fennell spent CA$297k on stock, and there wasn't any selling. This makes one think the business has some good points.
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. A high insider ownership often makes company leadership more mindful of shareholder interests. From our data, it seems that Reunion Gold insiders own 5.7% of the company, worth about CA$2.9m. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We do generally prefer see higher levels of insider ownership.
So What Do The Reunion Gold Insider Transactions Indicate?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little 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 Reunion Gold stock. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Reunion Gold. When we did our research, we found 3 warning signs for Reunion Gold (1 shouldn't be ignored!) that we believe deserve your full attention.
Of course Reunion Gold 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.
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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