Possible turnaround for New Found Gold Corp. (CVE:NFG) insiders, still down CA$41m after a CA$126m shopping spree

Insiders who purchased CA$126m worth of New Found Gold Corp. (CVE:NFG) shares over the past year recouped some of their losses after price gained 18% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled CA$41m since the time of purchase.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out the opportunities and risks within the CA Metals and Mining industry.

New Found Gold Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider Eric Sprott for CA$69m worth of shares, at about CA$8.35 per share. That means that even when the share price was higher than CA$5.66 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. 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. The only individual insider to buy over the last year was Eric Sprott.

Eric Sprott bought 15.00m shares over the last 12 months at an average price of CA$8.40. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

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).

Does New Found Gold Boast High Insider Ownership?

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. A high insider ownership often makes company leadership more mindful of shareholder interests. New Found Gold insiders own about CA$103m worth of shares. That equates to 11% 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.

What Might The Insider Transactions At New Found Gold Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. It would be great to see more insider buying, but overall it seems like New Found Gold insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing New Found Gold. Every company has risks, and we've spotted 4 warning signs for New Found Gold (of which 2 shouldn't be ignored!) you should know about.

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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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.