With Marathon Gold Corporation's (TSE:MOZ)) price down 11% this week, insiders might find some solace having sold CA$1.9m worth of shares earlier this year.

By
Simply Wall St
Published
May 11, 2022
TSX:MOZ
Source: Shutterstock

Insiders seem to have made the most of their holdings by selling CA$1.9m worth of Marathon Gold Corporation (TSE:MOZ) stock at an average sell price of CA$2.81 during the past year. The company’s market cap plunged by CA$66m after price dropped by 11% last week but insiders were able to limit their loss to an extent.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Marathon Gold

Marathon Gold Insider Transactions Over The Last Year

The insider, Hannes Portmann, made the biggest insider sale in the last 12 months. That single transaction was for CA$1.6m worth of shares at a price of CA$2.82 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is CA$2.03. So it may not shed much light on insider confidence at current levels.

Over the last year, we can see that insiders have bought 170.78k shares worth CA$441k. On the other hand they divested 680.00k shares, for CA$1.9m. Over the last year we saw more insider selling of Marathon Gold shares, than buying. 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!

insider-trading-volume
TSX:MOZ Insider Trading Volume May 11th 2022

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insiders at Marathon Gold Have Bought Stock Recently

It's good to see that Marathon Gold insiders have made notable investments in the company's shares. Not only was there no selling that we can see, but they collectively bought CA$76k worth of shares. This is a positive in our book as it implies some confidence.

Insider Ownership of Marathon Gold

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data indicates that Marathon Gold insiders own about CA$11m worth of shares (which is 2.2% of the company). We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Do The Marathon Gold Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. On the other hand the transaction history, over the last year, isn't so positive. We don't take much heart from transactions by Marathon Gold insiders over the last year. But they own a reasonable amount of the company, and there was some buying recently. So they seem pretty well aligned, overall. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Marathon Gold. At Simply Wall St, we've found that Marathon Gold has 5 warning signs (2 make us uncomfortable!) that deserve your attention before going any further with your analysis.

But note: Marathon Gold 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.

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.