Stock Analysis

    Have Insiders Been Buying Amarillo Gold Corporation (CVE:AGC) Shares?

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    It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Amarillo Gold Corporation (CVE:AGC).

    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, such insiders must disclose their trading activities, and not trade on inside information.

    We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.

    See our latest analysis for Amarillo Gold

    The Last 12 Months Of Insider Transactions At Amarillo Gold

    insider Eric Sprott made the biggest insider purchase in the last 12 months. That single transaction was for CA$5.0m worth of shares at a price of CA$0.20 each. That means that an insider was happy to buy shares at around the current price of CA$0.20. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. In this case we're pleased to report that the insider purchases were made at close to current prices.

    While Amarillo Gold insiders bought shares last year, they didn't sell. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

    TSXV:AGC Recent Insider Trading, January 3rd 2020
    TSXV:AGC Recent Insider Trading, January 3rd 2020

    Amarillo Gold is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

    Insiders at Amarillo Gold Have Bought Stock Recently

    Over the last three months, we've seen a bit of insider buying at Amarillo Gold. Executive Chairman Rowland Uloth purchased CA$53k worth of shares in that period. It's good to see the insider buying, as well as the lack of recent sellers. However, in this case the amount invested recently is quite small.

    Does Amarillo Gold 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 19% of Amarillo Gold shares, worth about CA$7.2m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

    What Might The Insider Transactions At Amarillo Gold Tell Us?

    The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Amarillo Gold insiders are well aligned, and that they may think the share price is too low. I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

    If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.

    If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

    We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.