Dome Gold Mines Insiders Miss 50% Gain After Offloading Stock

Last week, Dome Gold Mines Ltd's (ASX:DME) stock jumped 50%, but insiders who sold AU$302k worth of stock in over the past year are likely to be in a better position. Selling at an average price of AU$0.19, which is higher than the current price, may have been the wisest decision for these insiders as their investment would have been worth less now than when they sold.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Dome Gold Mines

The Last 12 Months Of Insider Transactions At Dome Gold Mines

The Non-Executive Director, Tadao Tsubata, made the biggest insider sale in the last 12 months. That single transaction was for AU$152k worth of shares at a price of AU$0.19 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (AU$0.15). So it may not shed much light on insider confidence at current levels. Tadao Tsubata was the only individual insider to sell shares in the last twelve months. Notably Tadao Tsubata was also the biggest buyer, having purchased AU$157k worth of shares.

Tadao Tsubata divested 1.57m shares over the last 12 months at an average price of AU$0.19. 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!

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Insiders At Dome Gold Mines Have Sold Stock Recently

The last quarter saw substantial insider selling of Dome Gold Mines shares. In total, Non-Executive Director Tadao Tsubata sold AU$150k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership

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. Insiders own 23% of Dome Gold Mines shares, worth about AU$13m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Dome Gold Mines Tell Us?

An insider sold Dome Gold Mines shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! 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. For instance, we've identified 6 warning signs for Dome Gold Mines (3 can't be ignored) you should be aware of.

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. 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.