We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell First Mining Gold Corp. (TSE:FF), you may well want to know whether insiders have been buying or selling.
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 equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
The Last 12 Months Of Insider Transactions At First Mining Gold
In the last twelve months, the biggest single purchase by an insider was when CEO & Director Daniel Wilton bought CA$540k worth of shares at a price of CA$0.27 per share. That means that even when the share price was higher than CA$0.26 (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. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Over the last year, we can see that insiders have bought 4.0m shares worth CA$1.0m. But they sold 37000 for CA$8.3k. In the last twelve months there was more buying than selling by First Mining Gold insiders. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
First Mining Gold Insiders Bought Stock Recently
There has been significantly more insider buying, than selling, at First Mining Gold, over the last three months. In fact, six insiders bought CA$206k worth of shares. But we did see Michel Bouchard sell shares worth CA$8.3k. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.
Insider Ownership of First Mining 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. From looking at our data, insiders own CA$4.8m worth of First Mining Gold stock, about 3.2% of the company. We prefer to see high levels of insider ownership.
So What Do The First Mining Gold Insider Transactions Indicate?
It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that First Mining Gold insiders are expecting a bright future. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course First Mining Gold may not be the best stock to buy. So you may wish to see this free collection of high quality 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.
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.