Lundin Gold Insiders Sold US$5.6m Of Shares Suggesting Hesitancy

In the last year, many Lundin Gold Inc. (TSE:LUG) insiders sold a substantial stake in the company which may have sparked shareholders' attention. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, if numerous insiders are selling, shareholders should investigate more.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Lundin Gold

Lundin Gold Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the President, Ronald Hochstein, for CA$1.7m worth of shares, at about CA$16.73 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of CA$30.90. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 11% of Ronald Hochstein's stake.

In the last twelve months insiders purchased 49.04k shares for CA$1.0m. But insiders sold 295.25k shares worth CA$5.6m. In total, Lundin Gold insiders sold more than they bought over the last year. 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insiders At Lundin Gold Have Sold Stock Recently

Over the last three months, we've seen notably more insider selling, than insider buying, at Lundin Gold. We note President Ronald Hochstein cashed in CA$478k worth of shares. On the flip side, Senior Vice President of Finance Chester See spent CA$2.7k on purchasing shares. Because the selling vastly outweighs the buying, we'd say this is a somewhat bearish sign.

Does Lundin Gold Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 0.8% of Lundin Gold shares, worth about CA$59m. 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 Does This Data Suggest About Lundin Gold Insiders?

Unfortunately, there has been more insider selling of Lundin Gold stock, than buying, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. On the plus side, Lundin Gold makes money, and is growing profits. Insiders own shares, but we're still pretty cautious, given the history of sales. 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. Case in point: We've spotted 3 warning signs for Lundin Gold you should be aware of.

Of course Lundin Gold may not be the best stock to buy. So you may wish to see this free collection of high quality 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.