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 before you buy or sell Orezone Gold Corporation (CVE:ORE), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. 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'.
Orezone Gold Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Independent Director, Joseph Conway, sold CA$261k worth of shares at a price of CA$1.00 per share. That means that an insider was selling shares at around the current price of CA$0.86. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern. Joseph Conway was the only individual insider to sell shares in the last twelve months.
Over the last year, we can see that insiders have bought 1.88m shares worth CA$1.1m. On the other hand they divested 275.00k shares, for CA$261k. Overall, Orezone Gold insiders were net buyers during the last year. 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!
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).
Orezone Gold Insiders Are Selling The Stock
There was substantially more insider selling, than buying, of Orezone Gold shares over the last three months. In that time, Independent Director Joseph Conway dumped CA$261k worth of shares. Meanwhile insiders bought CA$73k worth. We don't view these transactions as a positive sign.
Insider Ownership of Orezone 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data indicates that Orezone Gold insiders own about CA$13m worth of shares (which is 5.7% of the company). Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
What Might The Insider Transactions At Orezone Gold Tell Us?
Unfortunately, there has been more insider selling of Orezone Gold stock, than buying, in the last three months. But we take heart from prior transactions. It's good to see insiders are shareholders. So we're not overly bothered by recent selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Orezone Gold. Every company has risks, and we've spotted 4 warning signs for Orezone Gold (of which 1 shouldn't be ignored!) you should know about.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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 email@example.com.