Possible Bearish Signals With Aya Gold & Silver Insiders Disposing Stock

The fact that multiple Aya Gold & Silver Inc. (TSE:AYA) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Aya Gold & Silver

Aya Gold & Silver Insider Transactions Over The Last Year

The President, Benoit La Salle, made the biggest insider sale in the last 12 months. That single transaction was for CA$724k worth of shares at a price of CA$11.27 each. So it's clear an insider wanted to take some cash off the table, even below the current price of CA$12.29. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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 51% of Benoit La Salle's holding.

Over the last year we saw more insider selling of Aya Gold & Silver shares, than buying. 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!

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Aya Gold & Silver Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Aya Gold & Silver shares. In total, insiders sold CA$1.1m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership Of Aya Gold & Silver

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Aya Gold & Silver insiders own about CA$162m worth of shares (which is 10% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Aya Gold & Silver Insiders?

Insiders sold Aya Gold & Silver shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. But since Aya Gold & Silver is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For instance, we've identified 2 warning signs for Aya Gold & Silver (1 is a bit concerning) you should be aware of.

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 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.