Insider Spends CA$150k Buying More Shares In Red Lake Gold

Investors who take an interest in Red Lake Gold Inc. (CSE:RGLD) should definitely note that the President, Ryan Kalt, recently paid CA$0.05 per share to buy CA$150k worth of the stock. That's a very decent purchase to our minds and it grew their holding by a solid 23%.

Check out our latest analysis for Red Lake Gold

Red Lake Gold Insider Transactions Over The Last Year

In fact, the recent purchase by President Ryan Kalt was not their only acquisition of Red Lake Gold shares this year. Earlier in the year, they paid CA$0.055 per share in a CA$192k purchase. We do like to see buying, but this purchase was made at well below the current price of CA$0.10. 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.

Ryan Kalt bought a total of 9.70m shares over the year at an average price of CA$0.053. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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.

Does Red Lake Gold Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Red Lake Gold insiders own about CA$1.3m worth of shares. That equates to 28% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Red Lake Gold Insiders?

The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Given that insiders also own a fair bit of Red Lake Gold we think they are probably pretty confident of a bright future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To help with this, we've discovered 3 warning signs (2 are significant!) that you ought to be aware of before buying any shares in Red Lake Gold.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.