Insiders Buying Kalgoorlie Gold Mining Might Wish They Invested More, Stock Gains 37%

Insiders who bought Kalgoorlie Gold Mining Limited (ASX:KAL) stock in the last 12 months were richly rewarded last week. The company's market value increased by AU$5.5m as a result of the stock's 37% gain over the same period. In other words, the original AU$791.2k purchase is now worth AU$1.26m.

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.

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Kalgoorlie Gold Mining Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider Eduard Eshuys for AU$741k worth of shares, at about AU$0.06 per share. Even though the purchase was made at a significantly lower price than the recent price (AU$0.074), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

While Kalgoorlie Gold Mining insiders bought shares during the last year, they didn't sell. The average buy price was around AU$0.046. To my mind it is good that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. You can see a visual depiction of insider transactions (by companies and 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!

See our latest analysis for Kalgoorlie Gold Mining

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).

Kalgoorlie Gold Mining Insiders Bought Stock Recently

It's good to see that Kalgoorlie Gold Mining insiders have made notable investments in the company's shares. Specifically, insider Eduard Eshuys bought AU$741k worth of shares in that time, and we didn't record any sales whatsoever. This could be interpreted as suggesting a positive outlook.

Does Kalgoorlie Gold Mining 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. We usually like to see fairly high levels of insider ownership. It appears that Kalgoorlie Gold Mining insiders own 18% of the company, worth about AU$3.6m. 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 Kalgoorlie Gold Mining Insider Transactions Indicate?

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. Given that insiders also own a fair bit of Kalgoorlie Gold Mining we think they are probably pretty confident of a bright future. While it's good to be aware of 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. Case in point: We've spotted 5 warning signs for Kalgoorlie Gold Mining you should be aware of, and 4 of these are potentially serious.

Of course Kalgoorlie Gold Mining 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.