Stock Analysis

Insiders who bought stock earlier this year lose -US$211k as Magna Gold Corp. (CVE:MGR) drops to CA$4.1m

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TSXV:MGR
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The recent price decline of 53% in Magna Gold Corp.'s (CVE:MGR) stock may have disappointed insiders who bought US$239k worth of shares at an average price of US$0.39 in 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 US$28k, which is not great.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Our analysis indicates that MGR is potentially overvalued!

The Last 12 Months Of Insider Transactions At Magna Gold

In the last twelve months, the biggest single purchase by an insider was when President & CEO & Director Francisco Arturo Zepeda bought CA$89k worth of shares at a price of CA$0.34 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$0.045). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Francisco Arturo Zepeda was the only individual insider to buy during the last year.

Francisco Arturo Zepeda bought a total of 614.00k shares over the year at an average price of CA$0.39. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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TSXV:MGR Insider Trading Volume December 6th 2022

Magna Gold is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership Of Magna Gold

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. Insiders own 8.8% of Magna Gold shares, worth about CA$363k, according to our data. But they may have an indirect interest through a corporate structure that we haven't picked up on. We do generally prefer see higher levels of insider ownership.

So What Do The Magna Gold Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Magna Gold shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Magna Gold stock. 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. While conducting our analysis, we found that Magna Gold has 4 warning signs and it would be unwise to ignore them.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.

Valuation is complex, but we're helping make it simple.

Find out whether Magna Gold is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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