Need To Know: Silver Dollar Resources Inc. (CSE:SLV) Insiders Have Been Buying Shares

We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Silver Dollar Resources Inc. (CSE:SLV), 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 Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

View our latest analysis for Silver Dollar Resources

Silver Dollar Resources Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Eric Sprott bought CA$6.5m worth of shares at a price of CA$1.40 per share. That implies that an insider found the current price of CA$1.60 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. In this case we're pleased to report that the insider purchases were made at close to current prices.

Over the last year, we can see that insiders have bought 5.68m shares worth CA$7.3m. But they sold 89.00k shares for CA$120k. Overall, Silver Dollar Resources insiders were net buyers 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!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Silver Dollar Resources Insiders Are Selling The Stock

The last three months saw some Silver Dollar Resources insider selling. CA$30k worth of shares were sold by insiders. But Independent Director James Clark spent CA$2.8k on buying, too. While it's not great to see insider selling, the net amount sold isn't enough for us to want to read anything into it.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Silver Dollar Resources insiders own about CA$18m worth of shares. That equates to 31% 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.

So What Do The Silver Dollar Resources Insider Transactions Indicate?

Insider selling has just outweighed insider buying in the last three months. But the difference isn't enough to have us worried. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Silver Dollar Resources and we see no evidence to suggest they are worried about the 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. Every company has risks, and we've spotted 2 warning signs for Silver Dollar Resources you should know about.

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, but not derivative transactions.

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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. 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.
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