Insiders Who Purchased CA$2.09m Of Blue Star Gold Stock May Not Have Expected 10.0% Tumble

The recent price decline of 10.0% in Blue Star Gold Corp.'s (CVE:BAU) stock may have disappointed insiders who bought CA$2.09m worth of shares at an average price of CA$0.16 in the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth CA$582.1k, which is not what they expected.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Blue Star Gold

The Last 12 Months Of Insider Transactions At Blue Star Gold

In the last twelve months, the biggest single purchase by an insider was when Non-Independent Director Georg Pollert bought CA$2.0m worth of shares at a price of CA$0.16 per share. That means that an insider was happy to buy shares at above the current price of CA$0.045. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

In the last twelve months Blue Star Gold insiders were buying shares, but not selling. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart 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).

Blue Star Gold Insiders Bought Stock Recently

We saw some Blue Star Gold insider buying shares in the last three months. Insiders shelled out CA$51k for shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

Insider Ownership Of Blue Star Gold

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Blue Star Gold insiders own about CA$3.1m worth of shares (which is 60% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Blue Star Gold Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Blue Star Gold. Nice! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Blue Star Gold. For instance, we've identified 6 warning signs for Blue Star Gold (4 shouldn't be ignored) you should be aware of.

Of course Blue Star Gold may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.