Canadian Gold Insider Confidence Rewarded, Stock Hits CA$34m Market Cap

Last week, Canadian Gold Corp. (CVE:CGC) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 11% last week, resulting in a CA$3.8m increase in the company's market worth, implying a 37% gain on their initial purchase. In other words, the original CA$150.0k purchase is now worth CA$205.4k.

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.

Check out our latest analysis for Canadian Gold

Canadian Gold Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider Robert McEwen for CA$100k worth of shares, at about CA$0.14 per share. We do like to see buying, but this purchase was made at well below the current price of CA$0.20. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

Canadian Gold insiders may have bought shares in the last year, but they didn't sell any. You can see the insider transactions (by companies and 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!

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).

Does Canadian Gold Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Canadian Gold insiders own about CA$13m worth of shares. That equates to 39% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Canadian Gold Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Canadian Gold shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think Canadian Gold insiders are doubting the company, and they do own shares. 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. To help with this, we've discovered 4 warning signs (3 are significant!) that you ought to be aware of before buying any shares in Canadian Gold.

Of course Canadian 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.