Insiders probably made the right decision selling US$9.3m worth of shares earlier this year as Eldorado Gold Corporation's (TSE:ELD)) stock dips by 6.9%.

By
Simply Wall St
Published
May 09, 2022
TSX:ELD
Source: Shutterstock

By selling US$9.3m worth of Eldorado Gold Corporation (TSE:ELD) stock at an average sell price of US$14.25 over the last year, insiders seemed to have made the most of their holdings. The company's market valuation decreased by CA$159m after the stock price dropped 6.9% over the past week, but insiders were spared from painful 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.

View our latest analysis for Eldorado Gold

The Last 12 Months Of Insider Transactions At Eldorado Gold

Over the last year, we can see that the biggest insider sale was by the Executive VP & CFO, Philip Yee, for CA$2.9m worth of shares, at about CA$14.41 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 silver lining is that this sell-down took place above the latest price (CA$11.62). So it may not tell us anything about how insiders feel about the current share price.

All up, insiders sold more shares in Eldorado Gold than they bought, over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
TSX:ELD Insider Trading Volume May 9th 2022

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Insiders at Eldorado Gold Have Sold Stock Recently

The last three months saw significant insider selling at Eldorado Gold. In total, insiders sold CA$9.0m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Insider Ownership of Eldorado Gold

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 0.8% of Eldorado Gold shares, worth about CA$17m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Eldorado Gold Insider Transactions Indicate?

Insiders sold Eldorado Gold shares recently, but they didn't buy any. Zooming out, the longer term picture doesn't give us much comfort. While insiders do own shares, they don't own a heap, and they have been selling. We're in no rush to buy! 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. Case in point: We've spotted 2 warning signs for Eldorado Gold you should be aware of.

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, but not derivative transactions.

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