It is not uncommon to see companies perform well in the years after insiders buy shares. 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 shareholders might well want to know whether insiders have been buying or selling shares in Maya Gold and Silver Inc. (TSE:MYA).
What Is Insider Buying?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
Maya Gold and Silver Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Independent Non-Executive Director Robert Taub for CA$208k worth of shares, at about CA$2.40 per share. That means that even when the share price was higher than CA$1.95 (the recent price), an insider wanted to purchase shares. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
Happily, we note that in the last year insiders bought 456k shares for a total of CA$1.1m. Maya Gold and Silver may have bought shares in the last year, but they didn’t sell any. The chart below shows insider transactions (by 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!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Maya Gold and Silver Insiders Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at Maya Gold and Silver. Robert Taub spent CA$116k on stock, and there wasn’t any selling. This could be interpreted as suggesting a positive outlook.
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. It appears that Maya Gold and Silver insiders own 29% of the company, worth about CA$44m. 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 Maya Gold and Silver Insiders?
It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. However, we note that the company didn’t make a profit over the last twelve months, which makes us cautious. Insiders likely see value in Maya Gold and Silver shares, given these transactions (along with notable insider ownership of the company). Along with insider transactions, I recommend checking if Maya Gold and Silver is growing revenue. This free chart of historic revenue and earnings should make that easy.
But note: Maya Gold and Silver 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.
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