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Need To Know: New Carolin Gold Corp. (CVE:LAD) Insiders Have Been Buying Shares

Simply Wall St

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 New Carolin Gold Corp. (CVE:LAD).

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.

We don't think shareholders should simply follow insider transactions. 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'.

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Check out our latest analysis for New Carolin Gold

New Carolin Gold Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Director, Robert Lunde, for CA$91k worth of shares, at about CA$0.38 per share. While we don't usually like to see insider selling, it's more concerning if the sales take price at a lower price. The good news is that this large sale was at well above current price of CA$0.09. So it may not shed much light on insider confidence at current levels. Notably Robert Lunde was also the biggest buyer, having purchased CA$399k worth of shares.

Happily, we note that in the last year insiders paid CA$399k for 1.4m shares. But they sold 888k for CA$247k. In the last twelve months there was more buying than selling by New Carolin Gold insiders. They paid about CA$0.28 on average. I'd consider this a positive as it suggests insiders see value at around the current price. 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!

TSXV:LAD Recent Insider Trading, May 23rd 2019

New Carolin Gold is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Does New Carolin Gold Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Our data suggests New Carolin Gold insiders own 4.0% of the company, worth about CA$116k. However, it's possible that insiders might have an indirect interest through a more complex structure. We prefer to see high levels of insider ownership.

So What Do The New Carolin Gold Insider Transactions Indicate?

It doesn't really mean much that no insider has traded New Carolin Gold shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. We'd like to see bigger individual holdings. However, we don't see anything to make us think New Carolin Gold insiders are doubting the company. To put this in context, take a look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .

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.

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 editorial-team@simplywallst.com. 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.