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 Marvel Gold Limited (ASX:MVL), it sends a favourable message to the company’s shareholders.
Although we don’t think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
The Independent Non-Executive Chairman Stephen Dennis made the biggest insider purchase in the last 12 months. That single transaction was for AU$500k worth of shares at a price of AU$0.08 each. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.016). 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. To us, it’s very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
While Marvel Gold insiders bought shares during the last year, they didn’t sell. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Check out our latest analysis for Marvel Gold
Marvel Gold is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
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. Our data indicates that Marvel Gold insiders own about AU$1.6m worth of shares (which is 6.9% of the company). We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Overall, this level of ownership isn’t that impressive, but it’s certainly better than nothing!
The fact that there have been no Marvel Gold insider transactions recently certainly doesn’t bother us. However, our analysis of transactions over the last year is heartening. We’d like to see bigger individual holdings. However, we don’t see anything to make us think Marvel Gold insiders are doubting the company. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing Marvel Gold. To help with this, we’ve discovered 5 warning signs (3 shouldn’t be ignored!) that you ought to be aware of before buying any shares in Marvel Gold.