We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 Wesdome Gold Mines Ltd. (TSE:WDO).
Do Insider Transactions Matter?
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 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’.
The Last 12 Months Of Insider Transactions At Wesdome Gold Mines
President Duncan Middlemiss made the biggest insider purchase in the last 12 months. That single transaction was for CA$121k worth of shares at a price of CA$2.30 each. Even though the purchase was made at a significantly lower price, we still think insider buying is a positive. The insider buying may not tell us much about how insiders feel about the current share price.
Over the last year, we can see that insiders have bought 191.70k shares worth CA$454k. In total, Wesdome Gold Mines insiders bought more than they sold over the last year. They paid about CA$2.37 on average. To my mind it is good that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today’s levels. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insider Ownership of Wesdome Gold Mines
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. From our data, it seems that Wesdome Gold Mines insiders own 1.5% of the company, worth about CA$9.3m. Overall, this level of ownership isn’t that impressive, but it’s certainly better than nothing!
What Might The Insider Transactions At Wesdome Gold Mines Tell Us?
It doesn’t really mean much that no insider has traded Wesdome Gold Mines shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. We’d like to see bigger individual holdings. However, we don’t see anything to make us think Wesdome Gold Mines insiders are doubting the company. 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, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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