The recent 11% drop in Contact Gold Corp.'s (CVE:C) stock could come as a blow to insiders who purchased CA$725k worth of stock at an average buy price of CA$0.051 over the past 12 months. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth CA$564k which is not ideal.
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.
The Last 12 Months Of Insider Transactions At Contact Gold
Over the last year, we can see that the biggest insider purchase was by Director Andrew Farncomb for CA$207k worth of shares, at about CA$0.05 per share. That means that even when the share price was higher than CA$0.04 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. 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.
Over the last year, we can see that insiders have bought 14.09m shares worth CA$725k. But insiders sold 1.38m shares worth CA$69k. In the last twelve months there was more buying than selling by Contact Gold insiders. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Contact Gold is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Are Contact Gold Insiders Buying Or Selling?
There was some insider buying at Contact Gold over the last quarter. President Matthew Lennox-King shelled out CA$12k for shares in that time. It's great to see that insiders are only buying, not selling. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.
Insider Ownership Of Contact Gold
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 7.1% of Contact Gold shares, worth about CA$850k, according to our data. We do generally prefer see higher levels of insider ownership.
What Might The Insider Transactions At Contact Gold Tell Us?
We note a that there has been a bit of insider buying recently (but no selling). Overall the buying isn't worth writing home about. However, our analysis of transactions over the last year is heartening. The transactions are fine but it'd be more encouraging if Contact Gold insiders bought more shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Contact Gold. Be aware that Contact Gold is showing 5 warning signs in our investment analysis, and 4 of those are a bit unpleasant...
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, but not derivative transactions.
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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.
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