Newcore Gold Ltd. (CVE:NCAU) drops to CA$69m and insiders who purchased earlier this year lose another CA$2.7k

By
Simply Wall St
Published
November 24, 2021
TSXV:NCAU
Source: Shutterstock

Insiders who bought CA$276k worth of Newcore Gold Ltd.'s (CVE:NCAU) stock at an average buy price of CA$0.58 over the last year may be disappointed by the recent 22% decrease in the stock. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth CA$274k, which is not what they expected.

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.

View our latest analysis for Newcore Gold

Newcore Gold Insider Transactions Over The Last Year

The Independent Director Douglas Hurst made the biggest insider purchase in the last 12 months. That single transaction was for CA$95k worth of shares at a price of CA$0.60 each. That means that even when the share price was higher than CA$0.57 (the recent price), an insider wanted to purchase shares. 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. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

While Newcore Gold insiders bought shares during the last year, they didn't sell. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
TSXV:NCAU Insider Trading Volume November 25th 2021

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insiders at Newcore Gold Have Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at Newcore Gold. Insiders shelled out CA$52k for shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. However, in this case the amount invested recently is quite small.

Does Newcore Gold Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Newcore Gold insiders own about CA$15m worth of shares. That equates to 22% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Newcore Gold Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Newcore Gold insiders are well aligned, and that they may think the share price is too low. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Be aware that Newcore Gold is showing 6 warning signs in our investment analysis, and 2 of those are a bit concerning...

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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, but not derivative transactions.

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