Insider Buying: The Scotgold Resources Limited (LON:SGZ) Non-Executive Chairman Just Bought 6.1% More Shares

By
Simply Wall St
Published
January 20, 2022
AIM:SGZ
Source: Shutterstock

Potential Scotgold Resources Limited (LON:SGZ) shareholders may wish to note that the Non-Executive Chairman, Peter Hetherington, recently bought UK£116k worth of stock, paying UK£0.77 for each share. Although the purchase only increased their holding by 6.1%, it is still a solid purchase in our view.

Check out our latest analysis for Scotgold Resources

Scotgold Resources Insider Transactions Over The Last Year

In fact, the recent purchase by Peter Hetherington was the biggest purchase of Scotgold Resources shares made by an insider individual in the last twelve months, according to our records. That implies that an insider found the current price of UK£0.78 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. Happily, the Scotgold Resources insider decided to buy shares at close to current prices. Peter Hetherington was the only individual insider to buy shares in the last twelve months.

The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
AIM:SGZ Insider Trading Volume January 20th 2022

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

Does Scotgold Resources Boast High 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. We usually like to see fairly high levels of insider ownership. Scotgold Resources insiders own about UK£30m worth of shares (which is 66% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Scotgold Resources Tell Us?

The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Scotgold Resources. Nice! While we like knowing 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. For instance, we've identified 6 warning signs for Scotgold Resources (2 can't be ignored) you should be aware of.

But note: Scotgold Resources 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.

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