Lembit Janes Bought 5.8% More Shares In Spanish Mountain Gold

Potential Spanish Mountain Gold Ltd. (CVE:SPA) shareholders may wish to note that the Independent Director, Lembit Janes, recently bought CA$500k worth of stock, paying CA$0.14 for each share. While that's a very decent purchase to our minds, it was proportionally a bit modest, boosting their holding by just 5.8%.

See our latest analysis for Spanish Mountain Gold

Spanish Mountain Gold Insider Transactions Over The Last Year

Notably, that recent purchase by Independent Director Lembit Janes was not the only time they bought Spanish Mountain Gold shares this year. Earlier in the year, they paid CA$0.21 per share in a CA$5.8m purchase. That means that an insider was happy to buy shares at above the current price of CA$0.12. 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. In our view, the price an insider pays for shares is very important. 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.

In the last twelve months Spanish Mountain Gold insiders were buying shares, but not selling. 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!

Spanish Mountain Gold is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership Of Spanish Mountain Gold

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 27% of Spanish Mountain Gold shares, worth about CA$15m. 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 Spanish Mountain Gold Tell Us?

The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Spanish Mountain Gold insiders are well aligned, and that they may think the share price is too low. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Spanish Mountain Gold. Be aware that Spanish Mountain Gold is showing 4 warning signs in our investment analysis, and 2 of those are significant...

But note: Spanish Mountain 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.