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Whilst it may not be a huge deal, we thought it was good to see that the AEX Gold Inc. (CVE:AEX) Independent Non-Executive Director, Sigurbjorn Thorkelsson, recently bought CA$51k worth of stock, for CA$0.51 per share. Although the purchase is not a big one, increasing their shareholding by only 1.5%, it can be interpreted as a good sign.
The Last 12 Months Of Insider Transactions At AEX Gold
In the last twelve months, the biggest single purchase by an insider was when Founder Eldur Olafsson bought CA$171k worth of shares at a price of CA$0.77 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$0.52). 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 our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
While AEX Gold insiders bought shares during the last year, they didn't sell. Their average price was about CA$0.68. These transactions suggest that insiders have considered the current price attractive. 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!
AEX Gold is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does AEX Gold Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data indicates that AEX Gold insiders own about CA$5.6m worth of shares (which is 6.0% of the company). We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Whilst better than nothing, we're not overly impressed by these holdings.
So What Does This Data Suggest About AEX Gold Insiders?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. 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 AEX Gold stock. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Our analysis shows 4 warning signs for AEX Gold (2 are potentially serious!) and we strongly recommend you look at them before investing.
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.
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. 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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