Some of the losses seen by insiders who purchased AU$103.5k worth of Gold 50 Limited (ASX:G50) shares over the past year were recovered after the stock increased by 10.0% over the past week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled AU$22k since the time of purchase.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
See our latest analysis for Gold 50
Gold 50 Insider Transactions Over The Last Year
The Non-Executive Director Bernard Rowe made the biggest insider purchase in the last 12 months. That single transaction was for AU$100k worth of shares at a price of AU$0.14 each. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.11). 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 Gold 50 insiders bought shares during the last year, they didn’t sell. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Have Gold 50 Insiders Traded Recently?
There was only a small bit of insider buying, worth AU$1.3k, in the last three months. Overall, we don’t think these recent trades are particularly informative, one way or the other.
Insider Ownership
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Gold 50 insiders own about AU$4.3m worth of shares. That equates to 36% of the company. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Do The Gold 50 Insider Transactions Indicate?
We note a that there has been a bit of insider buying recently (but no selling). That said, the purchases were not large. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Gold 50 and their transactions don’t cause us concern. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing Gold 50. Be aware that Gold 50 is showing 5 warning signs in our investment analysis, and 3 of those are potentially serious…
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 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.