We often see insiders buying up shares in companies that perform well over the long term. 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 Steppe Gold Ltd. (TSE:STGO).
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 would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
The Last 12 Months Of Insider Transactions At Steppe Gold
There wasn’t any very large single transaction over the last year, but we can still observe some trading.
Over the last year, we can see that insiders have bought 278.62k shares worth CA$330k. In total, Steppe Gold insiders bought more than they sold over the last year. Their average price was about CA$1.19. These transactions suggest that insiders have considered the current price of CA$0.77 attractive. You can see the insider transactions over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Steppe Gold is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Steppe Gold Insiders Bought Stock Recently
It’s good to see that Steppe Gold insiders have made notable investments in the company’s shares. In total, insiders bought CA$105k worth of shares in that time, and we didn’t record any sales whatsoever. That shows some optimism about the company’s future.
Does Steppe Gold Boast High 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. Steppe Gold insiders own about CA$2.4m worth of shares (which is 7.6% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About Steppe Gold Insiders?
It’s certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss last year, which makes us a little cautious. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Steppe Gold stock. Of course, the future is what matters most. So if you are interested in Steppe Gold, you should check out this free report on analyst forecasts for the company.
But note: Steppe 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 firstname.lastname@example.org.