Good signs as a number of insiders are buying Gateway Mining shares

Normally, when an insider buys shares, it may not be a huge event. But when many insiders buy as they did in the case of… Gateway Mining Limited (Australian Stock Exchange: GML), which sends a positive message to the company’s shareholders.

Although we don’t believe shareholders should simply follow insider transactions, common sense dictates that you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Gateway Mining

Non-executive director Trent Franklin has made his biggest insider purchase in the last 12 months. That single trade was A$120,000 worth of shares at A$0.02 per share. This means that an insider found the current price of A$0.021 per share attractive. Of course they might have changed their minds. But this indicates that they are optimistic. If someone buys shares at a price well below current prices, that’s a good sign of balance, but keep in mind that they may not see any value anymore. The good news for Gateway Mining stockholders is that insiders have been buying at close to the current price.

Gateway Mining insiders may have bought shares in the last year, but they didn’t sell any. The chart below shows insider transactions (by companies and individuals) over the past year. If you click on the chart, you can see all the individual transactions, including the stock price, individual transactions and history!

Gateway Mining isn’t the only stock that insiders are buying. So take a peek at this free List of under the radar companies with insider buying.

During the last quarter, Gateway Mining insiders spent a significant amount on shares. Not only was there no selling that we could see, they bought a collective AU$192,000 worth of shares. This can be interpreted as indicating a positive outlook.

Many investors want to check how much insiders own a company. I think it’s a good sign if insiders own a large number of shares in the company. Gateway Mining insiders own shares worth about AU$1.7m. This equates to 20% of the company. We’ve certainly seen higher levels of insider ownership elsewhere, but this holding is enough to indicate alignment between insiders and other shareholders.

The recent insider buying is encouraging. We also gain confidence from the long-term picture of insider transactions. However, we note that the company did not make a profit in the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest that Gateway Mining insiders are well aligned, and that they may think the share price is too low. While it’s good to be aware of what’s going on in terms of insider ownership and transactions, we also make sure to consider the risks facing a stock before making any investment decision. For example, Gateway Mining has 6 warning signs (and 4 that relate) We think you should know about it.

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