It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Alacer Gold Corp. (TSE:ASR).
What Is Insider Buying?
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 would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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.
Alacer Gold Insider Transactions Over The Last Year
Independent Non-Executive Director Anna Kolonchina made the biggest insider purchase in the last 12 months. That single transaction was for CA$372k worth of shares at a price of CA$7.45 each. That means that an insider was happy to buy shares at above the current price of CA$6.79. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Happily, we note that in the last year insiders paid CA$497k for 75.00k shares. But they sold 30000 for CA$223k. In total, Alacer Gold insiders bought more than they sold over the last year. The average buy price was around CA$6.63. Although they bought at below the recent share price, it is good to see that insiders are willing to invest in the company. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
Alacer Gold is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Alacer Gold Insiders Bought Stock Recently
Over the last three months, we've seen significantly more insider buying, than insider selling, at Alacer Gold. We can see that Independent Non-Executive Director Anna Kolonchina paid CA$372k for shares in the company. On the other hand, Independent Chairman of the Board Edward Dowling netted CA$223k by selling. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.
Insider Ownership of Alacer 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 1.0% of Alacer Gold shares, worth about CA$21m. 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 Alacer Gold Insider Transactions Indicate?
It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. When combined with notable insider ownership, these factors suggest Alacer Gold insiders are well aligned, and that they may think the share price is too low. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Alacer Gold.
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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