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It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in G11 Resources Limited's (ASX:G11) case, it's fantastic news for shareholders.
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 G11 Resources
Over the last year, we can see that the biggest insider purchase was by Non-Executive Chairman Martin Donohue for AU$680k worth of shares, at about AU$0.02 per share. That means that even when the share price was higher than AU$0.014 (the recent price), an insider wanted to purchase shares. 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. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
In the last twelve months G11 Resources insiders were buying shares, but not selling. 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!
Check out our latest analysis for G11 Resources
There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
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. A high insider ownership often makes company leadership more mindful of shareholder interests. G11 Resources insiders own about AU$4.3m worth of shares. That equates to 32% of the company. 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 G11 Resources Insiders?
The fact that there have been no G11 Resources insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. Overall we don't see anything to make us think G11 Resources insiders are doubting the company, and they do own shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing G11 Resources. Case in point: We've spotted 5 warning signs for G11 Resources you should be aware of, and 3 of them are a bit unpleasant.