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It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Chaarat Gold Holdings Limited (LON:CGH), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
Chaarat Gold Holdings Insider Transactions Over The Last Year
CEO & Executive Director Artem Volynets made the biggest insider purchase in the last 12 months. That single transaction was for UK£128k worth of shares at a price of UK£0.26 each. So it’s clear an insider wanted to buy, at around the current price, which is UK£0.29. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it’s less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. Happily, the Chaarat Gold Holdings insiders decided to buy shares at close to current prices.
Over the last year, we can see that insiders have bought 2.6m shares worth UK£702k. Chaarat Gold Holdings may have bought shares in the last year, but they didn’t sell any. You can see a visual depiction of insider transactions (by 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!
Chaarat Gold Holdings Insiders Bought Stock Recently
Over the last quarter, Chaarat Gold Holdings insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought US$349k worth of shares. This could be interpreted as suggesting a positive outlook.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it’s a good sign if insiders own a significant number of shares in the company. Our data indicates that Chaarat Gold Holdings insiders own about UK£4.9m worth of shares (which is 4.2% of the company). However, it’s possible that insiders might have an indirect interest through a more complex structure. Whilst better than nothing, we’re not overly impressed by these holdings.
So What Does This Data Suggest About Chaarat Gold Holdings Insiders?
It’s certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn’t make a profit over the last twelve months, which makes us cautious. While the overall levels of insider ownership are below what we’d like to see, the history of transactions imply that Chaarat Gold Holdings insiders are reasonably well aligned, and optimistic for the future. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.