Insiders who sold US$4.7m worth of Eldorado Gold Corporation (TSE:ELD) stock last year were handsomely rewarded

Simply Wall St
January 14, 2022
Source: Shutterstock

Even though Eldorado Gold Corporation (TSE:ELD) stock gained 5.8% last week, insiders who sold US$4.7m worth of stock over the past year are probably better off. Selling at an average price of US$13.06, which is higher than the current price, may have been the best move for these insiders because their investment would have been worth less now than when they sold.

Although we don't think shareholders should simply follow insider transactions, 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 President, George Burns, for CA$1.7m worth of shares, at about CA$12.81 per share. So we know that an insider sold shares at around the present share price of CA$11.92. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.

All up, insiders sold more shares in Eldorado Gold 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 click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

TSX:ELD Insider Trading Volume January 14th 2022

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership of Eldorado Gold

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data indicates that Eldorado Gold insiders own about CA$11m worth of shares (which is 0.5% of the company). Whilst better than nothing, we're not overly impressed by these holdings.

What Might The Insider Transactions At Eldorado Gold Tell Us?

The fact that there have been no Eldorado Gold insider transactions recently certainly doesn't bother us. Still, the insider transactions at Eldorado Gold in the last 12 months are not very heartening. The modest level of insider ownership is, at least, some comfort. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Eldorado Gold has 3 warning signs we think 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.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.