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Should You Take Comfort From Insider Transactions At Yangarra Resources Ltd. (TSE:YGR)?

Simply Wall St

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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Yangarra Resources Ltd. (TSE:YGR).

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 don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'

View our latest analysis for Yangarra Resources

The Last 12 Months Of Insider Transactions At Yangarra Resources

Over the last year, we can see that the biggest insider purchase was by Independent Director Neil MacKenzie for CA$967k worth of shares, at about CA$5.41 per share. That means that an insider was happy to buy shares at above the current price of CA$2.18. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing 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.

Happily, we note that in the last year insiders bought 675k shares for a total of CA$2.8m. While Yangarra Resources insiders bought shares last year, they didn't sell. They paid about CA$4.22 on average. I'd consider this a positive as it suggests insiders see value at around the current price. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

TSX:YGR Recent Insider Trading, July 4th 2019

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

Insiders at Yangarra Resources Have Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at Yangarra Resources. Insiders bought CA$47k worth of shares in that time. It's great to see that insiders are only buying, not selling. But the amount invested in the last three months isn't enough for us too put much weight on it, as a single factor.

Does Yangarra Resources 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Yangarra Resources insiders own about CA$22m worth of shares. That equates to 12% 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 Yangarra Resources Insider Transactions Indicate?

Our data shows a little insider buying, but no selling, in the last three months. Overall the buying isn't worth writing home about. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Yangarra Resources and their transactions don't cause us concern. Of course, the future is what matters most. So if you are interested in Yangarra Resources, you should check out this free report on analyst forecasts for the company.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.

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.