Stock Analysis

Insiders probably made the right decision selling US$1.6m worth of shares earlier this year as NovaGold Resources Inc.'s (TSE:NG)) stock dips by 3.6%.

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TSX:NG
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Over the past year, insiders sold US$1.6m worth of NovaGold Resources Inc. (TSE:NG) stock at an average price of US$8.81 per share allowing them to get the most out of their money. The company's market worth decreased by CA$73m over the past week after the stock price dropped 3.6%, although insiders were able to minimize their losses

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

However if you'd rather see where the opportunities and risks are within NG's industry, you can check out our analysis on the CA Metals and Mining industry.

NovaGold Resources Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the President, Gregory Lang, for CA$783k worth of shares, at about CA$8.81 per share. While insider selling is a negative, to us, it is more negative if the shares are sold 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$5.89. So it may not tell us anything about how insiders feel about the current share price. Gregory Lang was the only individual insider to sell shares in the last twelve months.

Gregory Lang ditched 177.92k shares over the year. The average price per share was US$8.81. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
TSX:NG Insider Trading Volume September 27th 2022

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

Does NovaGold Resources Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. NovaGold Resources insiders own about CA$27m worth of shares. That equates to 1.4% of the company. 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 NovaGold Resources Insiders?

The fact that there have been no NovaGold Resources insider transactions recently certainly doesn't bother us. Our analysis of NovaGold Resources insider transactions leaves us cautious. But we do like the fact that insiders own a fair chunk of the company. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To that end, you should learn about the 2 warning signs we've spotted with NovaGold Resources (including 1 which makes us a bit uncomfortable).

But note: NovaGold Resources 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.

Valuation is complex, but we're helping make it simple.

Find out whether NovaGold Resources is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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About TSX:NG

NovaGold Resources

NovaGold Resources Inc. explores for and develops gold mineral properties in the United States.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation0
Future Growth0
Past Performance0
Financial Health5
Dividends0

Read more about these checks in the individual report sections or in our analysis model.

Excellent balance sheet with weak fundamentals.