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Hamelin Gold Slides As Insider Purchases Lose Another AU$58k

The recent price decline of 10% in Hamelin Gold Limited's (ASX:HMG) stock may have disappointed insiders who bought AU$200.0k worth of shares at an average price of AU$0.10 in the past 12 months. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only AU$142.0k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Hamelin Gold

Hamelin Gold Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when MD & Executive Director Peter Bewick bought AU$90k worth of shares at a price of AU$0.10 per share. That means that an insider was happy to buy shares at above the current price of AU$0.071. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

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While Hamelin Gold insiders bought shares during the last year, they didn't sell. You can see the insider transactions (by companies and 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!

insider-trading-volume
insider-trading-volume

Hamelin Gold is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Does Hamelin Gold 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. A high insider ownership often makes company leadership more mindful of shareholder interests. From our data, it seems that Hamelin Gold insiders own 14% of the company, worth about AU$1.6m. We do generally prefer see higher levels of insider ownership.

So What Does This Data Suggest About Hamelin Gold Insiders?

It doesn't really mean much that no insider has traded Hamelin Gold shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. The transactions are fine but it'd be more encouraging if Hamelin Gold insiders bought more shares in the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. At Simply Wall St, we've found that Hamelin Gold has 4 warning signs (3 shouldn't be ignored!) that deserve your attention before going any further with your analysis.

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 of direct interests only, but not derivative transactions or indirect interests.

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.