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It is not uncommon to see companies perform well in the years after insiders buy shares. 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 we'll take a look at whether insiders have been buying or selling shares in Fortuna Silver Mines Inc. (TSE:FVI).
What Is Insider Buying?
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.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
Fortuna Silver Mines Insider Transactions Over The Last Year
President Jorge Ganoza Durant made the biggest insider purchase in the last 12 months. That single transaction was for CA$589k worth of shares at a price of CA$3.55 each. That implies that an insider found the current price of CA$3.87 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. The good news for Fortuna Silver Mines share holders is that an insider was buying at near the current price. Jorge Ganoza Durant was the only individual insider to buy shares in the last twelve months.
Jorge Ganoza Durant purchased 247k shares over the year. The average price per share was CA$3.52. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Fortuna Silver Mines is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Fortuna Silver Mines
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Based on our data, Fortuna Silver Mines insiders have about 0.8% of the stock, worth approximately CA$5.2m. We consider this fairly low insider ownership.
So What Do The Fortuna Silver Mines Insider Transactions Indicate?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Fortuna Silver Mines insiders are expecting a bright future. Of course, the future is what matters most. So if you are interested in Fortuna Silver Mines, 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 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. Thank you for reading.