Should You Take Comfort From Insider Transactions At Chaarat Gold Holdings Limited (LON:CGH)?

We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Chaarat Gold Holdings Limited (LON:CGH), you may well want to know whether insiders have been buying or selling.

Do Insider Transactions Matter?

It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.

Check out our latest analysis for Chaarat Gold Holdings

The Last 12 Months Of Insider Transactions At Chaarat Gold Holdings

In the last twelve months, the biggest single purchase by an insider was when CEO & Executive Director Artem Volynets bought UK£128k worth of shares at a price of UK£0.26 per share. Even though the purchase was made at a significantly lower price than the recent price (UK£0.34), we still think insider buying is a positive. 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.

While Chaarat Gold Holdings insiders bought shares last year, they didn’t sell. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

AIM:CGH Recent Insider Trading, December 13th 2019
AIM:CGH Recent Insider Trading, December 13th 2019

Chaarat Gold Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insiders at Chaarat Gold Holdings Have Bought Stock Recently

Over the last quarter, Chaarat Gold Holdings insiders have spent a meaningful amount on shares. We can see that Non-Executive Director Robert Benbow paid UK£41k for shares in the company. No-one sold. This makes one think the business has some good points.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. From our data, it seems that Chaarat Gold Holdings insiders own 3.8% of the company, worth about UK£6.1m. However, it’s possible that insiders might have an indirect interest through a more complex structure. We do generally prefer see higher levels of insider ownership.

So What Does This Data Suggest About Chaarat Gold Holdings Insiders?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. Overall the buying isn’t worth writing home about. But insiders have shown more of an appetite for the stock, over the last year. We’d like to see bigger individual holdings. However, we don’t see anything to make us think Chaarat Gold Holdings insiders are doubting the company. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

But note: Chaarat Gold Holdings 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, but not derivative transactions.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.