Patagonia Gold Insiders Still US$51k Away From Original Investment Value

Some of the losses seen by insiders who purchased US$118.6k worth of Patagonia Gold Corp. (CVE:PGDC) shares over the past year were recovered after the stock increased by 17% over the past week. However, total losses seen by insiders are still US$51k since the time of purchase.

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.

Check out our latest analysis for Patagonia Gold

Patagonia Gold Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Independent Director Timothy Hunt bought CA$93k worth of shares at a price of CA$0.11 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$0.035). It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

Over the last year, we can see that insiders have bought 1.93m shares worth CA$119k. But insiders sold 5.00k shares worth CA$100.0. In total, Patagonia Gold insiders bought more than they sold over the last year. They paid about CA$0.061 on average. I'd consider this a positive as it suggests insiders see value at around the current price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Have Patagonia Gold Insiders Traded Recently?

We've only seen a tiny insider purchase valued at CA$2.2k, in the last three months. Overall, we don't think these recent trades are particularly informative, one way or the other.

Does Patagonia Gold Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Patagonia Gold insiders own 65% of the company, currently worth about CA$9.1m 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.

So What Does This Data Suggest About Patagonia Gold Insiders?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. That said, the purchases were not large. 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 Patagonia Gold insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. 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. To that end, you should learn about the 3 warning signs we've spotted with Patagonia Gold (including 2 which are concerning).

But note: Patagonia 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.