Several Insiders Invested In Zodiac Gold Flagging Positive News

Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Zodiac Gold Inc. (CVE:ZAU), it sends a favourable message to the company's shareholders.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

Zodiac Gold Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Director Mark Kol for CA$83k worth of shares, at about CA$0.07 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of CA$0.085. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Zodiac Gold insiders may have bought shares in the last year, but they didn't sell any. The average buy price was around CA$0.078. These transactions show that insiders have confidence to invest their own money in the stock, albeit at slightly below the recent price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

See our latest analysis for Zodiac Gold

Zodiac 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.

Zodiac Gold Insiders Bought Stock Recently

Over the last quarter, Zodiac Gold insiders have spent a meaningful amount on shares. Overall, two insiders shelled out CA$154k for shares in the company -- and none sold. This could be interpreted as suggesting a positive outlook.

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Zodiac Gold insiders own 28% of the company, worth about CA$3.1m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Zodiac Gold Tell Us?

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 Zodiac Gold insiders are well aligned, and that they may think the share price is too low. While it's good to be aware of 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. While conducting our analysis, we found that Zodiac Gold has 5 warning signs and it would be unwise to ignore them.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.