Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Gateway Mining Limited (ASX:GML), that sends out a positive message to the company's 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.
View our latest analysis for Gateway Mining
Gateway Mining Insider Transactions Over The Last Year
The Non-Executive Director Trent Franklin made the biggest insider purchase in the last 12 months. That single transaction was for AU$100k worth of shares at a price of AU$0.062 each. That means that even when the share price was higher than AU$0.024 (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. In our view, the price an insider pays for shares is very important. 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 Gateway Mining insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Gateway Mining is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does Gateway Mining Boast High 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. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Gateway Mining insiders own 21% of the company, worth about AU$1.3m. 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 Gateway Mining Insiders?
The fact that there have been no Gateway Mining insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. Insiders own shares in Gateway Mining and we see no evidence to suggest they are worried about the future. 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, Gateway Mining has 6 warning signs (and 4 which make us uncomfortable) we think you should know about.