Yahoo Finance Gold Mountain Insiders Lose Out As Stock Sinks To AU$0.003
The recent 14% drop in Gold Mountain Limited's (ASX:GMN) stock could come as a blow to insiders who purchased AU$230.0k worth of stock at an average buy price of AU$0.0036 over the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth AU$192.2k, which is not what they expected.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
See our latest analysis for Gold Mountain
Gold Mountain Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Executive Director David Evans bought AU$100k worth of shares at a price of AU$0.0037 per share. That means that even when the share price was higher than AU$0.003 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
Gold Mountain insiders may have bought shares in the last year, but they didn't sell any. 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!
Gold Mountain is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Gold Mountain Insiders Bought Stock Recently
It's good to see that Gold Mountain insiders have made notable investments in the company's shares. Overall, two insiders shelled out AU$230k for shares in the company -- and none sold. This is a positive in our book as it implies some confidence.
Does Gold Mountain Boast High Insider Ownership?
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. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 11% of Gold Mountain shares, worth about AU$1.5m, according to our data. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Whilst better than nothing, we're not overly impressed by these holdings.
So What Do The Gold Mountain Insider Transactions Indicate?
It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Gold Mountain insiders are reasonably well aligned, and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. While conducting our analysis, we found that Gold Mountain has 5 warning signs and it would be unwise to ignore them.
Of course Gold Mountain 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 of direct interests only, but not derivative transactions or indirect interests.
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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.
