Selling Gold Hydrogen Shares at a Lower Price Than Current Market Value May Have Been a Costly Mistake for Insiders

Gold Hydrogen Limited's (ASX:GHY) value has fallen 11% in the last week, but insiders who sold AU$2.9m worth of stock over the last year have had less success. Insiders would probably have been better off holding on to their shares given that the average selling price of AU$0.56 is still lower than the current share price.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At Gold Hydrogen

The insider, John Titus, made the biggest insider sale in the last 12 months. That single transaction was for AU$2.4m worth of shares at a price of AU$0.65 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is AU$0.46. So it may not tell us anything about how insiders feel about the current share price. John Titus was the only individual insider to sell over the last year.

John Titus ditched 5.07m shares over the year. The average price per share was AU$0.56. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

View our latest analysis for Gold Hydrogen

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Insiders At Gold Hydrogen Have Sold Stock Recently

The last quarter saw substantial insider selling of Gold Hydrogen shares. In total, insider John Titus sold AU$2.9m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Does Gold Hydrogen Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Gold Hydrogen insiders own about AU$39m worth of shares (which is 50% of the company). 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 Do The Gold Hydrogen Insider Transactions Indicate?

An insider sold Gold Hydrogen shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Gold Hydrogen. Our analysis shows 3 warning signs for Gold Hydrogen (1 is concerning!) and we strongly recommend you look at them before investing.

But note: Gold Hydrogen 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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.