Commodities

Should You Take Comfort From Insider Transactions At Great Thunder Gold Corp. (CVE:GTG)?

It is not uncommon to see companies perform well in the years after insiders buy shares. 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 shareholders might well want to know whether insiders have been buying or selling shares in Great Thunder Gold Corp. (CVE:GTG).

What Is Insider Selling?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.

We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.

See our latest analysis for Great Thunder Gold

Great Thunder Gold Insider Transactions Over The Last Year

Notably, that recent purchase by Blair Naughty is the biggest insider purchase of Great Thunder Gold shares that we’ve seen in the last year. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of CA$0.15. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn’t tell us much about what they think of current prices.

While Great Thunder Gold insiders bought shares last year, they didn’t sell. The chart below shows insider transactions (by 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!

TSXV:GTG Recent Insider Trading, January 18th 2020

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

Great Thunder Gold Insiders Bought Stock Recently

Over the last three months, we’ve seen significant insider buying at Great Thunder Gold. Not only was there no selling that we can see, but they collectively bought CA$118k worth of shares. This could be interpreted as suggesting a positive outlook.

Does Great Thunder Gold Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company 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 Great Thunder Gold insiders own 33% of the company, worth about CA$555k. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Great Thunder Gold Insiders?

It is good to see recent purchasing. And the longer term insider transactions also give us confidence. But we don’t feel the same about the fact the company is making losses. Insiders likely see value in Great Thunder Gold shares, given these transactions (along with notable insider ownership of the company). To put this in context, take a look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

Source

neallesh@yahoo.co.uk

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