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We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we’ll take a look at whether insiders have been buying or selling shares in Fortuna Silver Mines Inc. (TSE:FVI).
What Is Insider Selling?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
The Last 12 Months Of Insider Transactions At Fortuna Silver Mines
Over the last year, we can see that the biggest insider purchase was by President Jorge Ganoza Durant for CA$589k worth of shares, at about CA$3.55 per share. That implies that an insider found the current price of CA$3.63 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. 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. Happily, the Fortuna Silver Mines insiders decided to buy shares at close to current prices.
In the last twelve months insiders paid CA$935k for 264k shares purchased. While Fortuna Silver Mines insiders bought shares last year, they didn’t sell. You can see a visual depiction of insider transactions (by 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!
Insiders at Fortuna Silver Mines Have Bought Stock Recently
Over the last quarter, Fortuna Silver Mines insiders have spent a meaningful amount on shares. In total, insiders bought US$935k worth of shares in that time, and we didn’t record any sales whatsoever. That shows some optimism about the company’s future.
Insider Ownership of Fortuna Silver Mines
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with 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. From looking at our data, insiders own CA$5.2m worth of Fortuna Silver Mines stock, about 0.9% of the company. I generally like to see higher levels of ownership.
So What Does This Data Suggest About Fortuna Silver Mines Insiders?
It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. While the overall levels of insider ownership are below what we’d like to see, the history of transactions imply that Fortuna Silver Mines insiders are reasonably well aligned, and optimistic for the future. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
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.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.