Nevada King Gold's Recent Gains Improve Losses On Insider Purchases Worth CA$11.8m

Insiders who purchased CA$11.8m worth of Nevada King Gold Corp. (CVE:NKG) shares over the past year recouped some of their losses after price gained 26% last week. The purchase, however, has proven to be a pricey bet, with losses currently totalling CA$3.7m.

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

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The Last 12 Months Of Insider Transactions At Nevada King Gold

Over the last year, we can see that the biggest insider purchase was by insider Michael Parker for CA$5.5m worth of shares, at about CA$0.25 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$0.17). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

Happily, we note that in the last year insiders paid CA$12m for 47.12m shares. On the other hand they divested 20.00m shares, for CA$5.0m. In total, Nevada King Gold insiders bought more than they sold over the last year. 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!

Check out our latest analysis for Nevada King Gold

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

Insiders At Nevada King Gold Have Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at Nevada King Gold. Chief Financial Officer Jeffrey Stieber bought CA$26k worth of shares in that time. It's great to see that insiders are only buying, not selling. However, in this case the amount invested recently is quite small.

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. Insiders own 38% of Nevada King Gold shares, worth about CA$22m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Nevada King Gold Tell Us?

We note a that there has been a bit of insider buying recently (but no selling). Overall the buying isn't worth writing home about. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think Nevada King Gold insiders are doubting the company, and they do own shares. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example, Nevada King Gold has 4 warning signs (and 2 which can't be ignored) we think you should know about.

But note: Nevada King Gold 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 of direct interests only, but not derivative transactions or indirect interests.

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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.