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Insiders who bought CA$5.7m worth of Erdene Resource Development Corporation (TSE:ERD) stock in the last year recovered part of their losses as the stock rose by 19% last week. The purchase, however, has proven to be a pricey bet, with losses currently totalling CA$727k.
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.
See our latest analysis for Erdene Resource Development
The Last 12 Months Of Insider Transactions At Erdene Resource Development
In the last twelve months, the biggest single purchase by an insider was when insider Eric Sprott bought CA$3.6m worth of shares at a price of CA$0.41 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$0.32). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. 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.
While Erdene Resource Development insiders bought shares during the last year, they didn't sell. They paid about CA$0.36 on average. These transactions suggest that insiders have considered the current price attractive. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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.
Insiders at Erdene Resource Development Have Bought Stock Recently
Over the last quarter, Erdene Resource Development insiders have spent a meaningful amount on shares. In total, insiders bought CA$2.0m worth of shares in that time, and we didn't record any sales whatsoever. That shows some optimism about the company's future.
Insider Ownership of Erdene Resource Development
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Erdene Resource Development insiders own about CA$20m worth of shares. That equates to 20% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.