Yahoo Finance A number of insiders bought Sunshine Gold Limited (ASX:SHN) stock last year, which is great news for shareholders
When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Sunshine Gold Limited's (ASX:SHN) instance, it's good news for shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
View our latest analysis for Sunshine Gold
Sunshine Gold Insider Transactions Over The Last Year
The Non-Executive Director Paul Chapman made the biggest insider purchase in the last 12 months. That single transaction was for AU$440k worth of shares at a price of AU$0.02 each. We do like to see buying, but this purchase was made at well below the current price of AU$0.055. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
In the last twelve months insiders purchased 23.94m shares for AU$551k. But insiders sold 1.00m shares worth AU$20k. Overall, Sunshine Gold insiders were net buyers during the last year. Their average price was about AU$0.023. It is certainly positive to see 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 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 plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insider Ownership
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Sunshine Gold insiders own 46% of the company, currently worth about AU$12m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At Sunshine Gold Tell Us?
It doesn't really mean much that no insider has traded Sunshine Gold shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. It would be great to see more insider buying, but overall it seems like Sunshine Gold insiders are reasonably well aligned (owning significant chunk of the company's shares) 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. For example, Sunshine Gold has 3 warning signs (and 2 which are significant) we think you should know about.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
