Insiders at B2Gold Corp. (TSE:BTO) sold US$4.8m worth of stock at an average price of US$7.50 a share over the past year, making the most of their investment. After the stock price dropped 4.1% last week, the company's market value declined by US$211m, but insiders were able to mitigate their losses.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At B2Gold
Over the last year, we can see that the biggest insider sale was by the President, Clive Johnson, for CA$2.7m worth of shares, at about CA$8.98 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of CA$4.69. So it may not tell us anything about how insiders feel about the current share price. Notably Clive Johnson was also the biggest buyer, having purchased CA$1.0m worth of shares.
Happily, we note that in the last year insiders paid CA$1.0m for 313.94k shares. On the other hand they divested 641.90k shares, for CA$4.8m. All up, insiders sold more shares in B2Gold than they bought, over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
B2Gold Insiders Are Selling The Stock
Over the last three months, we've seen notably more insider selling, than insider buying, at B2Gold. We note insiders cashed in CA$1.1m worth of shares. On the flip side, insider Eduard Bartz spent CA$65k on purchasing shares. We don't view these transactions as a positive sign.
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. B2Gold insiders own about CA$71m worth of shares. That equates to 1.4% 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.
What Might The Insider Transactions At B2Gold Tell Us?
Unfortunately, there has been more insider selling of B2Gold stock, than buying, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But it is good to see that B2Gold is growing earnings. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! 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 5 warning signs (1 is potentially serious!) that you ought to be aware of before buying any shares in B2Gold.
But note: B2Gold 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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