Insiders who bought AU$516k worth of Tombola Gold Ltd (ASX:TBA) stock in the last year recovered part of their losses as the stock rose by 10% last week. However, total losses seen by insiders are still AU$96k but in since the time of purchase.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At Tombola Gold
The insider Wayne McCrae made the biggest insider purchase in the last 12 months. That single transaction was for AU$185k worth of shares at a price of AU$0.049 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.043). It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Wayne McCrae was the only individual insider to buy shares in the last twelve months.
Wayne McCrae bought 9.76m shares over the last 12 months at an average price of AU$0.053. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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).
Does Tombola Gold Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 29% of Tombola Gold shares, worth about AU$8.0m. 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 Tombola Gold Tell Us?
It doesn't really mean much that no insider has traded Tombola Gold shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Tombola Gold and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Tombola Gold. Our analysis shows 5 warning signs for Tombola Gold (2 are potentially serious!) and we strongly recommend you look at them before investing.
Of course Tombola 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.
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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