Have Insiders Been Buying Goldcliff Resource Corporation (CVE:GCN) Shares?

By
Simply Wall St
Published
September 06, 2020
TSXV:GCN

We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Goldcliff Resource Corporation (CVE:GCN), you may well want to know whether insiders have been buying or selling.

Do Insider Transactions Matter?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.

Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

See our latest analysis for Goldcliff Resource

The Last 12 Months Of Insider Transactions At Goldcliff Resource

In the last twelve months, the biggest single purchase by an insider was when President George Sanders bought CA$280k worth of shares at a price of CA$0.08 per share. So it's clear an insider wanted to buy, at around the current price, which is CA$0.085. 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. The good news for Goldcliff Resource share holders is that an insider was buying at near the current price. The only individual insider to buy over the last year was George Sanders.

George Sanders bought a total of 3.53m shares over the year at an average price of CA$0.08. 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!

insider-trading-volume
TSXV:GCN Insider Trading Volume September 6th 2020

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

Does Goldcliff Resource Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Goldcliff Resource insiders own 41% of the company, currently worth about CA$1.6m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Goldcliff Resource Tell Us?

It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Goldcliff Resource. That's what I like to see! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that Goldcliff Resource is showing 3 warning signs in our investment analysis, and 2 of those don't sit too well with us...

Of course Goldcliff Resource 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, but not derivative transactions.

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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. 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.
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