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Should You Take Comfort From Insider Transactions At Marathon Gold Corporation (TSE:MOZ)?

We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 Marathon Gold Corporation (TSE:MOZ).

Do Insider Transactions Matter?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.

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 Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.

View our latest analysis for Marathon Gold

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The Last 12 Months Of Insider Transactions At Marathon Gold

Over the last year, we can see that the biggest insider purchase was by President Phillip Walford for CA$100k worth of shares, at about CA$0.85 per share. So it’s clear an insider wanted to buy, at around the current price. 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. In any event it’s generally a positive if insiders are buying shares at around the current price.

Happily, we note that in the last year insiders bought 332.25k shares for a total of CA$286k. Overall, Marathon Gold insiders were net buyers last year. The average buy price was around CA$0.86. It’s great to see insiders putting their own cash into the company’s stock, albeit at below the recent share price (CA$0.91). You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

TSX:MOZ Insider Trading January 30th 19
TSX:MOZ Insider Trading January 30th 19

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.

Marathon Gold Insiders Bought Stock Recently

Over the last three months, we’ve seen significant insider buying at Marathon Gold. Overall, 4 insiders shelled out CA$80k for shares in the company — and none sold. This makes one think the business has some good points.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. From our data, it seems that Marathon Gold insiders own 5.6% of the company, worth about CA$8.1m. But they may have an indirect interest through a corporate structure that we haven’t picked up on. Whilst better than nothing, we’re not overly impressed by these holdings.

What Might The Insider Transactions At Marathon Gold Tell Us?

The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. But we don’t feel the same about the fact the company is making losses. While the overall levels of insider ownership are below what we’d like to see, the history of transactions imply that Marathon Gold insiders are reasonably well aligned, and optimistic for the future. Of course, the future is what matters most. So if you are interested in Marathon Gold, you should check out this free report on analyst forecasts for the company.

Of course Marathon Gold may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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 editorial-team@simplywallst.com.

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