Should You Take Comfort From Insider Transactions At Alacer Gold Corp. (TSE:ASR)?

We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So we’ll take a look at whether insiders have been buying or selling shares in Alacer Gold Corp. (TSE:ASR).

Do Insider Transactions Matter?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, rules govern insider transactions, and certain disclosures are required.

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.

See our latest analysis for Alacer Gold

The Last 12 Months Of Insider Transactions At Alacer Gold

Over the last year, we can see that the biggest insider purchase was by Independent Non-Executive Director Anna Kolonchina for CA$372k worth of shares, at about CA$7.45 per share. That means that even when the share price was higher than CA$3.81 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. 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.

Happily, we note that in the last year insiders paid CA$497k for 75.00k shares. On the other hand they divested 30000 shares, for CA$223k. In total, Alacer Gold insiders bought more than they sold over the last year. Their average price was about CA$6.63. This is nice to see since it implies that insiders might see value around current prices. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

TSX:ASR Recent Insider Trading, March 24th 2020
TSX:ASR Recent Insider Trading, March 24th 2020

Alacer 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 of Alacer Gold

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. Insiders own 1.0% of Alacer Gold shares, worth about CA$11m, according to our data. We do generally prefer see higher levels of insider ownership.

So What Do The Alacer Gold Insider Transactions Indicate?

It doesn’t really mean much that no insider has traded Alacer Gold shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Insiders own shares in Alacer Gold and we see no evidence to suggest they are worried about the future. While we like knowing what’s going on with the insider’s ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To assist with this, we’ve discovered 1 warning sign that you should run your eye over to get a better picture of Alacer Gold.

But note: Alacer Gold may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.