OceanaGold Insiders Sell US$7.6m Of Stock, Possibly Signalling Caution

In the last year, many OceanaGold Corporation (TSE:OGC) insiders sold a substantial stake in the company which may have sparked shareholders' attention. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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OceanaGold Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Chief Exploration Officer, Craig Feebrey, sold CA$3.3m worth of shares at a price of CA$6.12 per share. That means that even when the share price was below the current price of CA$6.81, an insider wanted to cash in some shares. 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. We note that the biggest single sale was 99% of Craig Feebrey's holding.

All up, insiders sold more shares in OceanaGold than they bought, over the last year. 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!

Check out our latest analysis for OceanaGold

I will like OceanaGold better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

OceanaGold Insiders Are Selling The Stock

Over the last three months, we've seen notably more insider selling, than insider buying, at OceanaGold. In total, insiders sold CA$4.8m worth of shares in that time. On the flip side, Independent Non-Executive Director Ian Reid spent CA$146k on purchasing shares (as mentioned above) . The share price has moved a bit recently, but it's hard to argue that the selling is a positive.

Does OceanaGold 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. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that OceanaGold insiders own 0.3% of the company, worth about CA$15m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About OceanaGold Insiders?

Unfortunately, there has been more insider selling of OceanaGold stock, than buying, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. But since OceanaGold is profitable and growing, we're not too worried by this. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. So we'd only buy after careful consideration. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. You'd be interested to know, that we found 1 warning sign for OceanaGold and we suggest you have a look.

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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.