Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Sunshine Gold Limited (ASX:SHN), it sends a favourable message to the company's shareholders.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
See our latest analysis for Sunshine Gold
Sunshine Gold Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Non-Executive Director Paul Chapman bought AU$100k worth of shares at a price of AU$0.025 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.017). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
In the last twelve months Sunshine Gold insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
Sunshine Gold is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. 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's great to see that Sunshine Gold insiders own 48% of the company, worth about AU$6.3m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About Sunshine Gold Insiders?
It doesn't really mean much that no insider has traded Sunshine Gold shares in the last quarter. However, our analysis of transactions over the last year is heartening. It would be great to see more insider buying, but overall it seems like Sunshine Gold insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. 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. To help with this, we've discovered 6 warning signs (5 are concerning!) that you ought to be aware of before buying any shares in Sunshine Gold.