Bullish Rua Gold Insider Buying Worth CA$2.00m Yet To Pay Off

The recent price decline of 10.0% in Rua Gold Inc.'s (CVE:RUA) stock may have disappointed insiders who bought CA$2.00m worth of shares at an average price of CA$0.71 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 CA$1.78m, which is not great.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

The Last 12 Months Of Insider Transactions At Rua Gold

Over the last year, we can see that the biggest insider purchase was by Chairman Oliver Lennox-King for CA$1m worth of shares, at about CA$0.60 per share. That implies that an insider found the current price of CA$0.63 per share to be enticing. 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. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. Happily, the Rua Gold insiders decided to buy shares at close to current prices.

In the last twelve months Rua Gold insiders were buying shares, but not selling. They paid about CA$0.71 on average. These transactions suggest that insiders have considered the current price attractive. 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!

View our latest analysis for Rua Gold

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.

Rua Gold Insiders Bought Stock Recently

It's good to see that Rua Gold insiders have made notable investments in the company's shares. Overall, eight insiders shelled out CA$1.3m for shares in the company -- and none sold. This could be interpreted as suggesting a positive outlook.

Insider Ownership Of Rua Gold

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. From our data, it seems that Rua Gold insiders own 14% of the company, worth about CA$4.7m. We do generally prefer see higher levels of insider ownership.

So What Do The Rua Gold Insider Transactions Indicate?

It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Rua 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. For instance, we've identified 3 warning signs for Rua Gold (2 are a bit unpleasant) you should be aware of.

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 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.