Insiders Re-Evaluate Their CA$750.0k Stock Purchase As Silver Dollar Resources Falls To CA$13m

Insiders who acquired CA$750.0k worth of Silver Dollar Resources Inc.'s (CSE:SLV) stock at an average price of CA$0.25 in the past 12 months may be dismayed by the recent 20% price decline. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth CA$600.0k, which is not great.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

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Silver Dollar Resources Insider Transactions Over The Last Year

The insider Eric Sprott made the biggest insider purchase in the last 12 months. That single transaction was for CA$750k worth of shares at a price of CA$0.25 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$0.20). It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Eric Sprott was the only individual insider to buy during the last year.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

View our latest analysis for Silver Dollar Resources

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 Silver Dollar Resources Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 19% of Silver Dollar Resources shares, worth about CA$2.4m. 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 Do The Silver Dollar Resources Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Silver Dollar Resources shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders own shares in Silver Dollar Resources and we see no evidence to suggest they are worried about the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Silver Dollar Resources. Our analysis shows 3 warning signs for Silver Dollar Resources (2 don't sit too well with us!) and we strongly recommend you look at them before investing.

But note: Silver Dollar Resources may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.