We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Kirkland Lake Gold Ltd. (TSE:KL).
What Is Insider Selling?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
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. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.
The Last 12 Months Of Insider Transactions At Kirkland Lake Gold
The Independent Director Peter Grosskopf made the biggest insider purchase in the last 12 months. That single transaction was for CA$516k worth of shares at a price of CA$51.67 each. That means that even when the share price was higher than CA$43.55 (the recent price), an insider wanted to purchase shares. 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. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
In the last twelve months insiders purchased 11.78k shares for CA$597k. But they sold 4.99k shares for CA$316k. In the last twelve months there was more buying than selling by Kirkland Lake Gold insiders. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
Kirkland Lake Gold is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Kirkland Lake Gold Have Bought Stock Recently
It's good to see that Kirkland Lake Gold insiders have made notable investments in the company's shares. Not only was there no selling that we can see, but they collectively bought CA$585k worth of shares. This is a positive in our book as it implies some confidence.
Insider Ownership of Kirkland Lake Gold
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Based on our data, Kirkland Lake Gold insiders have about 0.05% of the stock, worth approximately CA$6.0m. We consider this fairly low insider ownership.
So What Does This Data Suggest About Kirkland Lake Gold Insiders?
It's certainly positive to see the recent insider purchases. 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 Kirkland Lake Gold insiders are expecting a bright future. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Every company has risks, and we've spotted 2 warning signs for Kirkland Lake Gold you should know about.
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 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.