Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Newcore Gold Ltd. (CVE:NCAU), it sends a favourable message to the company's shareholders.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Newcore Gold

The Last 12 Months Of Insider Transactions At Newcore Gold

Over the last year, we can see that the biggest insider purchase was by Independent Director Douglas Hurst for CA$95k worth of shares, at about CA$0.60 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$0.30). Their view may have changed since then, but at least it shows they felt optimistic at the time. 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 Newcore Gold insiders were buying shares, but not selling. Their average price was about CA$0.45. I'd consider this a positive as it suggests insiders see value at around the current price. 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!

Newcore Gold is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insiders At Newcore Gold Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at Newcore Gold. Not only was there no selling that we can see, but they collectively bought CA$123k worth of shares. That shows some optimism about the company's future.

Insider Ownership Of Newcore Gold

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Newcore Gold insiders own about CA$8.4m worth of shares. That equates to 20% 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 Do The Newcore Gold Insider Transactions Indicate?

It is good to see recent purchasing. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Given that insiders also own a fair bit of Newcore Gold we think they are probably pretty confident of a bright 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. At Simply Wall St, we've found that Newcore Gold has 4 warning signs (2 are significant!) that deserve your attention before going any further with your analysis.

But note: Newcore 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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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