New Gold Insiders Placed Bullish Bets Worth US$713.8k

When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in New Gold Inc.'s (TSE:NGD) instance, it's good news for shareholders.

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

View our latest analysis for New Gold

The Last 12 Months Of Insider Transactions At New Gold

The Executive VP & COO Yohann Bouchard made the biggest insider purchase in the last 12 months. That single transaction was for CA$614k worth of shares at a price of CA$2.35 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of CA$2.85. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

New Gold insiders may have bought shares in the last year, but they didn't sell any. 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!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

New Gold Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at New Gold. Not only was there no selling that we can see, but they collectively bought CA$714k worth of shares. This could be interpreted as suggesting a positive outlook.

Does New Gold Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company 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. Insiders own 4.8% of New Gold shares, worth about CA$109m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The New Gold Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest New Gold insiders are well aligned, and quite possibly think the share price is too low. Looks promising! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - New Gold has 1 warning sign we think you should be aware of.

But note: New 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 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.