Should You Take Comfort From Insider Transactions At Denison Mines Corp. (TSE:DML)?

We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Denison Mines Corp. (TSE:DML), you may well want to know whether insiders have been buying or selling.

What Is Insider Selling?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’

See our latest analysis for Denison Mines

The Last 12 Months Of Insider Transactions At Denison Mines

There wasn’t any very large single transaction over the last year, but we can still observe some trading.

In the last twelve months insiders paid CA$314k for 348k shares purchased. Denison Mines insiders may have bought shares in the last year, but they didn’t sell any. They paid about CA$0.90 on average. I’d consider this a positive as it suggests insiders see value at around the current price, which is CA$0.55. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

TSX:DML Recent Insider Trading, August 27th 2019
TSX:DML Recent Insider Trading, August 27th 2019

Insider Ownership of Denison Mines

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. From looking at our data, insiders own CA$1.5m worth of Denison Mines stock, about 0.5% of the company. I generally like to see higher levels of ownership.

So What Do The Denison Mines Insider Transactions Indicate?

It doesn’t really mean much that no insider has traded Denison Mines shares in the last quarter. However, our analysis of transactions over the last year is heartening. While we have no worries about the insider transactions, we’d be more comfortable if they owned more Denison Mines stock. Of course, the future is what matters most. So if you are interested in Denison Mines, you should check out this free report on analyst forecasts for the company.

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, but not derivative transactions.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.