Insiders Rewarded With CA$1.7m Addition To Investment As Lavras Gold Stock Hits CA$150m

Lavras Gold Corp. (CVE:LGC) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 32% resulting in a CA$41m addition to the company’s market value. Put another way, the original CA$5.64m acquisition is now worth CA$7.33m.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

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Lavras Gold Insider Transactions Over The Last Year

The insider, Eric Sprott, made the biggest insider sale in the last 12 months. That single transaction was for CA$1.6m worth of shares at a price of CA$2.05 each. That means that even when the share price was below the current price of CA$2.96, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 13% of Eric Sprott's holding.

In the last twelve months insiders purchased 2.48m shares for CA$5.6m. But insiders sold 1.42m shares worth CA$3.1m. In total, Lavras Gold insiders bought more than they sold over the last year. 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!

See our latest analysis for Lavras Gold

Lavras Gold is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insiders At Lavras Gold Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at Lavras Gold. Independent Director Lawrence Lepard spent CA$647k on stock, and there wasn't any selling. That shows some optimism about the company's future.

Insider Ownership Of Lavras Gold

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Lavras Gold insiders own about CA$47m worth of shares. That equates to 32% 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 Does This Data Suggest About Lavras Gold Insiders?

It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Lavras Gold insiders are well aligned, and that they may think the share price is too low. 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 - Lavras Gold has 3 warning signs we think you should be aware of.

But note: Lavras Gold may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.