Golcap Resources Insider Stock Sellers Must Be Relieved As Market Cap Falls To CA$4.2m

Insiders at Golcap Resources Corp. (CSE:GCP) sold CA$252k worth of stock at an average price of CA$0.043 a share over the past year, making the most of their investment. The company's market valuation decreased by CA$1.5m after the stock price dropped 35% over the past week, but insiders were spared from painful losses.

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.

Check out our latest analysis for Golcap Resources

The Last 12 Months Of Insider Transactions At Golcap Resources

The insider, Emma Fairhurst, made the biggest insider sale in the last 12 months. That single transaction was for CA$225k worth of shares at a price of CA$0.04 each. So it's clear an insider wanted to take some cash off the table, even below the current price of CA$0.11. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 40% of Emma Fairhurst's holding.

All up, insiders sold more shares in Golcap Resources than they bought, over the last year. They sold for an average price of about CA$0.043. It's not particularly great to see insiders were selling shares at below recent prices. Of course, the sales could be motivated for a multitude of reasons, so we shouldn't jump to conclusions. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like Golcap Resources better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Does Golcap Resources Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From our data, it seems that Golcap Resources insiders own 13% of the company, worth about CA$544k. But they may have an indirect interest through a corporate structure that we haven't picked up on. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

What Might The Insider Transactions At Golcap Resources Tell Us?

The fact that there have been no Golcap Resources insider transactions recently certainly doesn't bother us. The insider transactions at Golcap Resources are not inspiring us to buy. We also note that, as far as we can see, insider ownership is fairly low, compared to other companies. 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. For example - Golcap Resources has 5 warning signs we think you should be aware of.

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.