Insiders Give Up AU$47k As Challenger Gold Stock Drops To AU$0.05

Insiders who acquired AU$152.7k worth of Challenger Gold Limited's (ASX:CEL) stock at an average price of AU$0.072 in the past 12 months may be dismayed by the recent 12% price decline. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth AU$106.0k, which is not great.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Challenger Gold

Challenger Gold Insider Transactions Over The Last Year

The Non-Executive Director Fletcher Quinn made the biggest insider purchase in the last 12 months. That single transaction was for AU$78k worth of shares at a price of AU$0.07 each. That means that an insider was happy to buy shares at above the current price of AU$0.05. 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. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Fletcher Quinn was the only individual insider to buy shares in the last twelve months.

Fletcher Quinn bought a total of 2.12m shares over the year at an average price of AU$0.072. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Does Challenger Gold Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It appears that Challenger Gold insiders own 21% of the company, worth about AU$15m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Challenger Gold Insider Transactions Indicate?

The fact that there have been no Challenger Gold insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. Overall we don't see anything to make us think Challenger Gold insiders are doubting the company, and they do own shares. 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. Our analysis shows 4 warning signs for Challenger Gold (2 are a bit concerning!) and we strongly recommend you look at these before investing.

Of course Challenger 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 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com