We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Garibaldi Resources Corp. (CVE:GGI).
Do Insider Transactions Matter?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Colombia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
Check out our latest analysis for Garibaldi Resources
Garibaldi Resources Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Eric Sprott for CA$5.2m worth of shares, at about CA$2.40 per share. So it's clear an insider wanted to buy, even at a higher price. 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. That purchase may suggest an expectation of positive returns over the long term.
Happily, we note that in the last year insiders paid CA$17m for 6.88m shares. But they sold 524.00k for CA$1.3m. Overall, Garibaldi Resources insiders were net buyers last year. The average buy price was around CA$2.51. These transactions suggest that insiders have considered the current price of CA$1.11 attractive. You can see the insider transactions 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!
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Garibaldi Resources Insiders Are Selling The Stock
We have seen a bit of insider selling at Garibaldi Resources, over the last three months. Executive VP Barrie Di Castri sold CA$44k worth of shares in that time. But CA$8.2k was spent on buying, too, . While it's not great to see insider selling, the net amount sold isn't enough for us to want to read anything into it.
Insider Ownership of Garibaldi Resources
Many investors like to check how much of a company is owned by 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. Garibaldi Resources insiders own 25% of the company, currently worth about CA$30m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Garibaldi Resources Tell Us?
We note a that there's been a little more insider selling than buying, recently. But the difference isn't enough to have us worried. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Garibaldi Resources and we see no evidence to suggest they are worried about the future. To put this in context, take a look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .
Of course Garibaldi Resources may not be the best stock to buy. So you may wish to see this freecollection of high quality companies.
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The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.