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It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Alio Gold Inc. (TSE:ALO).
Do Insider Transactions Matter?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. 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.’
Alio Gold Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Director George Brack bought CA$183k worth of shares at a price of CA$1.83 per share. That means that an insider was happy to buy shares at above the current price. Their view may have changed since then, but at least it shows they felt optimistic at the time. It’s not at all bad to see insiders buy shares at or above current prices.
Over the last year, we can see that insiders have bought 220.00k shares worth CA$295k. On the other hand they divested 4.19k shares, for CA$3.8k. In total, Alio Gold insiders bought more than they sold over the last year. The average buy price was around CA$1.34. This is nice to see since it implies that insiders might see value around current prices (around CA$1.06). You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Are Alio Gold Insiders Buying Or Selling?
In the last quarter Director Jose Vizquerra-Benavides sold US$3.8k worth of equity. That’s not a lot. The net selling is so small that it’s hard to draw any conclusions from these recent transactions.
Insider Ownership of Alio Gold
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. From what we can see in our data, insiders own only about CA$838k worth of Alio Gold shares. It’s always possible we are missing something but from our data, it looks like insider ownership is minimal.
What Might The Insider Transactions At Alio Gold Tell Us?
Our data shows a little more insider selling than buying in the last three months. But the difference is small, and thus, not concerning. On a brighter note, the transactions over the last year are encouraging. We’d like to see bigger individual holdings. However, we don’t see anything to make us think Alio Gold insiders are doubting the company. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
But note: Alio Gold 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.