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Should You Take Comfort From Insider Transactions At Granada Gold Mine Inc. (CVE:GGM)?

Simply Wall St

We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Granada Gold Mine Inc. (CVE:GGM), you may well want to know whether insiders have been buying or selling.

What Is Insider Selling?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.

We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'

Check out our latest analysis for Granada Gold Mine

Granada Gold Mine Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Chairman & CEO Frank Basa for CA$79k worth of shares, at about CA$0.15 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$0.12). Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares is very important. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Frank Basa was the only individual insider to buy shares in the last twelve months.

Frank Basa purchased 535k shares over the year. The average price per share was CA$0.15. 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!

TSXV:GGM Recent Insider Trading, April 12th 2019

Granada Gold Mine is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Does Granada Gold Mine Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Based on our data, Granada Gold Mine insiders have about 3.7% of the stock, worth approximately CA$306k. We prefer to see high levels of insider ownership.

So What Do The Granada Gold Mine Insider Transactions Indicate?

The fact that there have been no Granada Gold Mine 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 Granada Gold Mine insiders are doubting the company. To put this in context, take a look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .

But note: Granada Gold Mine 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.