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 Gold 50 Limited (ASX:G50), 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, we do think it is perfectly logical to keep tabs on what insiders are doing.
Check out our latest analysis for Gold 50
The Last 12 Months Of Insider Transactions At Gold 50
Over the last year, we can see that the biggest insider purchase was by Non-Executive Director Bernard Rowe for AU$100k worth of shares, at about AU$0.14 per share. So it’s clear an insider wanted to buy, at around the current price, which is AU$0.14. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today’s share price, as the discount to value may have narrowed with the rising price. In this case we’re pleased to report that the insider purchases were made at close to current prices.
Gold 50 insiders may have bought shares in the last year, but they didn’t sell any. 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!
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.
Insider Ownership
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. Gold 50 insiders own about AU$5.5m worth of shares. That equates to 36% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Gold 50 Insider Transactions Indicate?
The fact that there have been no Gold 50 insider transactions recently certainly doesn’t bother us. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Gold 50 and their transactions don’t cause us concern. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. When we did our research, we found 5 warning signs for Gold 50 (4 shouldn’t be ignored!) that we believe deserve your full attention.
But note: Gold 50 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 of direct interests only, but not derivative transactions or indirect interests.
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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.