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From what we can see, insiders were net buyers in Chesapeake Gold Corp.'s (CVE:CKG ) during the past 12 months. That is, insiders acquired the stock in greater numbers than they sold it.
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.
See our latest analysis for Chesapeake Gold
Chesapeake Gold Insider Transactions Over The Last Year
Notably, that recent purchase by insider Eric Sprott was not the only time they bought Chesapeake Gold shares this year. They previously made an even bigger purchase of CA$297k worth of shares at a price of CA$2.97 per share. That means that an insider was happy to buy shares at above the current price of CA$2.53. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. The only individual insider to buy over the last year was Eric Sprott.
Eric Sprott bought a total of 325.10k shares over the year at an average price of CA$2.70. 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
Insider Ownership Of Chesapeake 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. We usually like to see fairly high levels of insider ownership. Insiders own 33% of Chesapeake Gold shares, worth about CA$60m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Chesapeake Gold Insider Transactions Indicate?
The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Chesapeake Gold insiders are well aligned, and that they may think the share price is too low. 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 found 2 warning signs for Chesapeake Gold that deserve your attention before buying any shares.