It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Cygnus Gold Limited's (ASX:CY5) case, it's fantastic news for shareholders.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
Cygnus Gold Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Joint Company Secretary Michael Naylor bought AU$109k worth of shares at a price of AU$0.11 per share. We do like to see buying, but this purchase was made at well below the current price of AU$0.14. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
While Cygnus Gold insiders bought shares during the last year, they didn't sell. 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!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insider Ownership of Cygnus Gold
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. It appears that Cygnus Gold insiders own 39% of the company, worth about AU$7.4m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Cygnus Gold Insiders?
There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. Insiders own shares in Cygnus Gold and we see no evidence to suggest they are worried about the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Cygnus Gold. When we did our research, we found 5 warning signs for Cygnus Gold (2 are concerning!) that we believe deserve your full attention.
Of course Cygnus Gold may not be the best stock to buy. So you may wish to see this free collection of high quality 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.
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.