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Insiders who bought CA$934.3k worth of Chesapeake Gold Corp. (CVE:CKG) stock in the last year recovered part of their losses as the stock rose by 14% last week. However, total losses seen by insiders are still CA$520k since the time of purchase.
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.
View our latest analysis for Chesapeake Gold
The Last 12 Months Of Insider Transactions At Chesapeake Gold
In the last twelve months, the biggest single purchase by an insider was when insider Eric Sprott bought CA$297k worth of shares at a price of CA$2.97 per share. That means that even when the share price was higher than CA$1.09 (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. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
In the last twelve months Chesapeake Gold insiders were buying shares, but not selling. Their average price was about CA$2.46. This is nice to see since it implies that insiders might see value around current prices. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Chesapeake Gold is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Chesapeake Gold Insiders Bought Stock Recently
We saw some Chesapeake Gold insider buying shares in the last three months. Executive Chairman of the Board P. Reifel bought CA$56k worth of shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Chesapeake Gold insiders own 33% of the company, worth about CA$24m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.