Insider Stock Buying Of Lavras Gold Delivers Return On CA$2.20m Investment

Insiders who purchased Lavras Gold Corp. (CVE:LGC) shares in the past 12 months are unlikely to be deeply impacted by the stock's 12% decline over the past week. After accounting for the recent loss, the CA$2.20m worth of shares they purchased is now worth CA$3.21m, suggesting a good return on their investment.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Lavras Gold

Lavras Gold Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Eric Sprott bought CA$1.7m worth of shares at a price of CA$1.35 per share. So it's clear an insider wanted to buy, at around the current price, which is CA$1.37. 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. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for Lavras Gold share holders is that insiders were buying at near the current price.

While Lavras Gold insiders bought shares during the last year, they didn't sell. The average buy price was around CA$0.94. We don't deny that it is nice to see insiders buying stock in the company. But we must note that the investments were made at well below today's share price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart 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).

Insiders At Lavras Gold Have Bought Stock Recently

It's good to see that Lavras Gold insiders have made notable investments in the company's shares. In total, insiders bought CA$2.2m worth of shares in that time, and we didn't record any sales whatsoever. That shows some optimism about the company's future.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Lavras Gold insiders own 26% of the company, worth about CA$18m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Lavras Gold Tell Us?

The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Insiders likely see value in Lavras Gold shares, given these transactions (along with notable insider ownership of the company). 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. When we did our research, we found 5 warning signs for Lavras Gold (3 don't sit too well with us!) that we believe deserve your full attention.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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 of direct interests only, but not derivative transactions or indirect interests.

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.