Premier Gold Mines Limited explores for, develops, and produces gold and silver deposits in Canada, the United States, and Mexico. Premier Gold Mines's insiders have invested 67.30k shares in the small-cap stocks within the past three months. Generally, insiders buying more shares in their own firm sends a bullish signal. A two-decade research published in The MIT Press (1998) showed that stocks following insider buying outperformed the market by 4.5%. However, these signals may not be enough to gain conviction on whether to invest. I will be analysing whether these buying activities are supported by favourable future outlook and recent share price volatility.
Check out our latest analysis for Premier Gold Mines
Which Insiders Are Buying?
There were more Premier Gold Mines insiders that have bought shares than those that have sold. In total, individual insiders own over 5.95 million shares in the business, which makes up around 2.93% of total shares outstanding.
Insiders that have recently ramped up their holdings are:| Name | Management | Board | Total Annual Compensation |
|---|
Is Future Growth Outlook As Bullish?
On the surface, analysts’ revenue growth projection of 10.6% over the next three years provides a subdued outlook moving forward, however, insiders may be more optimistic than the market, with their net buying activity.
Digging deeper into the line items, analysts anticipate negative growth in its top-line over the next year, which indicates the company may be facing some headwinds. This is expected to impact the bottom line with a growth of -14.9% next year, indicating cost-cutting may not be significant enough to pull it through into a positive growth region yet.
Although, insiders seem to know something the market does not and have been ramping up their holdings in times of uncertainty. This indicates they may see a turnaround or deem the stock to be over-penalized by negative market sentiment.Can Share Price Volatility Explain The Buy?
Alternatively, the timing of these insider transactions may have been driven by share price volatility. A correlation could mean directors are trading on market inefficiencies based on their belief of the company’s intrinsic value.
In the past three months, Premier Gold Mines’s share price reached a high of CA$2.8 and a low of CA$1.77. This indicates a fairly large volatility with a share price movement of 58.19%.
Insiders could perceive this meaningful movement as an opportunity to accumulate their shareholdings.Next Steps:
Premier Gold Mines’s insider meaningful buying activity tells us the shares are currently in favour, although the expected earnings growth challenges this conclusion, whereas a fairly volatile stock price could be a driver to transact. Although insider buying can be a useful prompt, following the lead of an insider, however, will never replace diligent research. there are two important aspects you should further research:
- Financial Health: Does Premier Gold Mines have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Other High Quality Alternatives : Are there other high quality stocks you could be holding instead of Premier Gold Mines? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing!
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.