Insiders Who Purchased CA$5.17m Of Blue Star Gold Stock May Not Have Expected 11% Tumble

The recent 11% drop in Blue Star Gold Corp.'s (CVE:BAU) stock could come as a blow to insiders who purchased CA$5.17m worth of stock at an average buy price of CA$0.39 over the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth CA$2.06m, which is not great.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See 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$2.4m worth of shares at a price of CA$0.38 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$0.15). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

In the last twelve months Blue Star Gold insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

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

Are Blue Star Gold Insiders Buying Or Selling?

We've only seen a tiny insider purchase valued at CA$1.9k, in the last three months. So it is hard to draw any conclusion about how insiders are feeling about the stock, from these recent trades.

Does Blue Star Gold Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Blue Star Gold insiders own about CA$7.6m worth of shares (which is 60% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Blue Star Gold Tell Us?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. That said, the purchases were not large. But insiders have shown more of an appetite for the stock, over the last year. It would be great to see more insider buying, but overall it seems like Blue Star Gold insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example, Blue Star Gold has 6 warning signs (and 4 which are significant) we think you should know about.

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 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.