Insiders Of Prodigy Gold Are Up 51% On Their AU$1.87m Purchase

Prodigy Gold NL (ASX:PRX) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 20%, resulting in a AU$3.4m rise in the company's market capitalisation, translating to a gain of 51% on their initial investment. As a result, the stock they originally bought for AU$1.87m is now worth AU$2.82m.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

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The Last 12 Months Of Insider Transactions At Prodigy Gold

In the last twelve months, the biggest single purchase by an insider was when insider Charles Arve bought AU$1.0m worth of shares at a price of AU$0.002 per share. Even though the purchase was made at a significantly lower price than the recent price (AU$0.003), 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.

In the last twelve months Prodigy Gold insiders were buying shares, but not selling. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

View our latest analysis for Prodigy Gold

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Prodigy Gold Insiders Bought Stock Recently

Over the last quarter, Prodigy Gold insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought AU$1.2m worth of shares. That shows some optimism about the company's future.

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. Prodigy Gold insiders own about AU$4.1m worth of shares. That equates to 20% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Prodigy Gold Tell Us?

The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Prodigy Gold insiders are well aligned, and that they may think the share price is too low. 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. At Simply Wall St, we've found that Prodigy Gold has 5 warning signs (4 are potentially serious!) that deserve your attention before going any further with your analysis.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.