Trade Alert: Eric Sprott At Outcrop Gold Corp. (CVE:OCG), Has Just Spent CA$2.7m Buying 96% More Shares

Those following along with Outcrop Gold Corp. (CVE:OCG) will no doubt be intrigued by the recent purchase of shares by insider Eric Sprott, who spent a stonking CA$2.7m on stock at an average price of CA$0.28. That increased their holding by a full 96%, which arguably implies the sort of confidence required for a shy sweet-natured nerd to ask the most popular kid in the school to go out on a date.

Check out our latest analysis for Outcrop Gold

Outcrop Gold Insider Transactions Over The Last Year

In fact, the recent purchase by Eric Sprott was the biggest purchase of Outcrop Gold shares made by an insider individual in the last twelve months, according to our records. That implies that an insider found the current price of CA$0.34 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. 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. Happily, the Outcrop Gold insider decided to buy shares at close to current prices. The only individual insider to buy over the last year was Eric Sprott.

Eric Sprott bought 19.64m shares over the last 12 months at an average price of CA$0.19. 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!

TSXV:OCG Insider Trading Volume June 25th 2020
TSXV:OCG Insider Trading Volume June 25th 2020

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.

Does Outcrop Gold Boast High Insider Ownership?

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. Outcrop Gold insiders own 43% of the company, currently worth about CA$15m based on the recent share price. 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 Outcrop Gold Insiders?

It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. However, we note that the company didn’t make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest Outcrop Gold insiders are well aligned, and quite possibly think the share price is too low. Looks promising! 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. At Simply Wall St, we’ve found that Outcrop Gold has 4 warning signs (2 are a bit concerning!) that deserve your attention before going any further with your analysis.

Of course Outcrop Gold may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.

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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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