In the last year, multiple insiders have substantially increased their holdings of Prodigy Gold NL (ASX:PRX) stock, indicating that insiders' optimism about the company's prospects has increased.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At Prodigy Gold
Over the last year, we can see that the biggest insider purchase was by insider Murray Pollock for AU$910k worth of shares, at about AU$0.03 per share. That means that even when the share price was higher than AU$0.012 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. 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.
In the last twelve months insiders purchased 98.97m shares for AU$1.8m. But insiders sold 114.31k shares worth AU$1.3k. In total, Prodigy Gold insiders bought more than they sold over the last year. The average buy price was around AU$0.018. I'd consider this a positive as it suggests insiders see value at around the current price. The chart below shows insider transactions (by companies and 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!
Prodigy Gold is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders At Prodigy Gold Have Bought Stock Recently
Over the last three months, we've seen significantly more insider buying, than insider selling, at Prodigy Gold. In total, insider Charles Arve bought AU$565k worth of shares in that time. But insider Charles Arve sold shares worth AU$1.3k. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.
Does Prodigy Gold Boast High Insider Ownership?
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. From our data, it seems that Prodigy Gold insiders own 9.4% of the company, worth about AU$2.0m. Whilst better than nothing, we're not overly impressed by these holdings.
What Might The Insider Transactions At Prodigy Gold Tell Us?
It's certainly positive to see the recent insider purchase. 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. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Prodigy Gold stock. 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 example, Prodigy Gold has 6 warning signs (and 4 which are a bit unpleasant) we think you should know about.
But note: Prodigy 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, but not derivative transactions.
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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.
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