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Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Prodigy Gold NL (ASX:PRX), that sends out a positive message to the company's shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.
Prodigy Gold Insider Transactions Over The Last Year
In fact, the recent purchase by insider Charles Arve was not their only acquisition of Prodigy Gold shares this year. Earlier in the year, they paid AU$0.0019 per share in a AU$462k purchase. That means that an insider was happy to buy shares at around the current price of AU$0.002. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. In this case we're pleased to report that the insider purchases were made at close to current prices.
While Prodigy Gold insiders bought shares during the last year, they didn't sell. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Check out our latest analysis for Prodigy Gold
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.
Prodigy Gold Insiders Bought Stock Recently
Over the last three months, we've seen a bit of insider buying at Prodigy Gold. insider Charles Arve purchased AU$78k worth of shares in that period. It's good to see the insider buying, as well as the lack of recent sellers. But the amount invested in the last three months isn't enough for us too put much weight on it, as a single factor.
Insider Ownership
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Prodigy Gold insiders own about AU$1.2m worth of shares. That equates to 19% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.