Much research shows that executives, directors or others with inside knowledge of a public company, buying its shares is a useful barometer of broad shifts in market sentiment of the stock. This is because their access to information aids them in more informed decision-making. However, its certainly not enough to base your investment decision based on insider transactions, but these events do warrant a deeper dive into the stocks.
Klondex Mines Ltd. (TSX:KDX)
Klondex Mines Ltd., together with its subsidiaries, acquires, explores, develops, and produces mineral properties in the United States and Canada. Formed in 1971, and headed by CEO Paul Huet, the company now has 400 employees and has a market cap of CAD CA$359.22M, putting it in the small-cap group.
Klondex Mines Ltd (TSX:KDX) is one of United States’s small-cap stocks that saw some insider buying over the past three months, with insiders investing in 24,000 shares during this period. In total, individual insiders own over 3 million shares in the business, which makes up around 1.83% of total shares outstanding.
Insiders that have recently ramped up their holdings are: Paul Huet (board member) . , Richard Hall (management and board member) . and William Matlack (board member) .
Analysts anticipate a relatively flat top-line growth year-on-year over the next couple of years. However, earnings are predicted to grow at an impressive rate of 126.89% in the upcoming year, from today’s level, which could indicate the company’s cost controls will show meaningful results, offsetting the slow revenue growth. Insiders may have confidence in these cost initiatives, or believe the market has overly penalized the company’s shares, leading to an opportune time to buy. Dig deeper into Klondex Mines here.
Asanko Gold Inc. (TSX:AKG)
Asanko Gold Inc. engages in the exploration, development, and production of gold properties. Established in 1999, and headed by CEO Peter Breese, the company now has 380 employees and with the company’s market cap sitting at CAD CA$229.90M, it falls under the small-cap group.
Asanko Gold Inc (TSX:AKG) is one of Canada’s small-cap stocks that saw some insider buying over the past three months, with insiders investing in more than 7 million shares during this period. In total, individual insiders own over 5 million shares in the business, which makes up around 2.54% of total shares outstanding.
The entity that bought on the open market in the last three months was
Zijin Mining Group Company Limited. Although this is an institutional investor, rather than a company executive or board member, the insights gained from direct access to management as a large investor would make it more well-informed than the average retail investor. In this specific instance, I would classify this investor as a company insider.
Analysts anticipate an impressive double-digit top-line growth of 17.02% per year over the next five years, which appears to flow through to a large earnings growth rate of 39.04% per annum. If insiders believe these benefits are defensible, this could be a motivation for the net buying activity. More detail on Asanko Gold here.
Home Capital Group Inc. (TSX:HCG)
Home Capital Group Inc., through its subsidiary, Home Trust Company, provides deposits, mortgage lending, retail credit, and credit card issuing services in Canada. The company size now stands at 733 people and with the company’s market capitalisation at CAD CA$1.34B, we can put it in the small-cap stocks category.
Home Capital Group Inc’s (TSX:HCG) insiders have invested 84,000 shares in the large-cap stocks within the past three months. In total, individual insiders own less than one million shares in the business, or around 0.73% of total shares outstanding.
Insiders that have recently bought more shares are: Alan Hibben (board member) . , Bradley Kotush (board member) . , Brenda Eprile (board member) . , Claude Lamoureux (management) . , James Lisson (management and board member) . , Sharon Sallows (board member) . and Yousry Bissada .
Analysts anticipate an impressive double-digit top-line growth next year, which appears to flow through to a large earnings growth rate of 243.72%. If insiders believe these benefits are defensible, this could be a motivation for the net buying activity. Dig deeper into Home Capital Group here.
For more stocks with high, positive trading volume by insiders, take a look at our free platform to explore the interactive list of stocks with recent insider buying.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.