Bullish Pure Gold Mining Inc. (CVE:PGM) investors are yet to receive a pay off on their CA$3.2m bet
Insiders who acquired CA$3.2m worth of Pure Gold Mining Inc.'s (CVE:PGM) stock at an average price of CA$0.22 in the past 12 months may be dismayed by the recent 13% price decline. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth CA$1.9m, which is not great.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for Pure Gold Mining
Pure Gold Mining Insider Transactions Over The Last Year
The President Mark O'Dea made the biggest insider purchase in the last 12 months. That single transaction was for CA$1.2m worth of shares at a price of CA$0.15 each. That means that an insider was happy to buy shares at above the current price of CA$0.13. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels. Notably Mark O'Dea was also the biggest seller.
Happily, we note that in the last year insiders paid CA$3.2m for 14.94m shares. But insiders sold 300.00k shares worth CA$212k. Overall, Pure Gold Mining insiders were net buyers during the last year. The average buy price was around CA$0.22. This is nice to see since it implies that insiders might see value around current prices. You can see the insider transactions (by companies and 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!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insiders At Pure Gold Mining Have Bought Stock Recently
It's good to see that Pure Gold Mining insiders have made notable investments in the company's shares. President Mark O'Dea spent CA$89k on stock, and there wasn't any selling. This is a positive in our book as it implies some confidence.
Insider Ownership Of Pure Gold Mining
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data suggests Pure Gold Mining insiders own 4.1% of the company, worth about CA$3.9m. We prefer to see high levels of insider ownership.
What Might The Insider Transactions At Pure Gold Mining Tell Us?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Pure Gold Mining insiders are expecting a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Pure Gold Mining. Case in point: We've spotted 4 warning signs for Pure Gold Mining you should be aware of, and 2 of these are a bit unpleasant.
Of course Pure Gold Mining 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here