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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in ASA Gold and Precious Metals Limited (NYSE:ASA).
What Is Insider Selling?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
Check out our latest analysis for ASA Gold and Precious Metals
The Last 12 Months Of Insider Transactions At ASA Gold and Precious Metals
Over the last year, we can see that the biggest insider sale was by the Principal Executive Officer & COO, Alexander Merk, for US$184k worth of shares, at about US$13.55 per share. That means that even when the share price was below the current price of US$21.62, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 30% of Alexander Merk's holding. The only individual insider seller over the last year was Alexander Merk. Notably Alexander Merk was also the biggest buyer, having purchased US$221k worth of shares.
Happily, we note that in the last year insiders paid US$221k for 17.45k shares. But they sold 13.60k shares for US$184k. Overall, ASA Gold and Precious Metals insiders were net buyers during the last year. The average buy price was around US$12.66. We don't deny that it is nice to see insiders buying stock 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 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!