Insiders at Barrick Gold Corporation (TSE:ABX) are likely glad they bought last year, as their $33 million investment now stands at $34 million.
Insiders who bought Barrick Gold Corporation (EAST: ABX) 12-month equity fans probably aren’t as affected by last week’s 5.1% loss. After factoring in the recent loss, the $33 million worth of stock they bought is now worth $34 million, suggesting a good return on their investment.
While we don’t believe shareholders should simply follow insider trading, we would consider it foolish to ignore insider trading altogether.
Barrick Gold insider trading over the past year
Chairman Dennis Bristow made the biggest insider buy in the past 12 months. This single transaction involved C$5.9 million worth of shares at a price of C$29.66 each. This means that an insider was happy to buy shares above the current price of C$28.65. It is very possible that they regret the purchase, but it is more likely that they are optimistic about the company. For us, it is very important to consider the price that insiders pay for the shares. Generally speaking, it comes to our attention when insiders have bought stocks at higher prices than they are now, as it suggests that they thought the stock was worth buying, even at a higher price.
Fortunately, we note that last year insiders paid C$33 million for 1.19 million shares. But insiders sold 288.97k shares worth C$8.9 million. In total, Barrick Gold insiders bought more than they sold over the past year. You can see insider trading (by companies and individuals) over the past year illustrated in the table below. If you click on the chart, you can see all individual trades including stock price, individual and date!
Barrick Gold isn’t the only insider stock to buy. So take a look at this free list of growing companies with insider buying.
Barrick Gold insiders recently bought shares
There have been significantly more insider buying than selling at Barrick Gold over the past three months. Insiders spent C$21 million on stocks. But insiders only sold shares worth C$7.3 million. Insiders have been spending more to buy stocks than they have to sell, so overall we think they’re probably bullish.
Barrick Gold Insider Ownership
Another way to test alignment between a company’s executives and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely insiders will be incentivized to build the company for the long term. It’s great to see that Barrick Gold insiders own 0.6% of the company, worth approximately C$318 million. I like to see this level of insider ownership because it increases the chances that management is thinking about the best interests of shareholders.
What could insider trading at Barrick Gold tell us?
It is certainly positive to see the recent insider buying. And longer-term insider trading also gives us confidence. When combined with notable insider ownership, these factors suggest that Barrick Gold insiders are well aligned and most likely believe the stock price is too low. That’s what I like to see! So, while it is useful to know what insiders are doing in terms of buying or selling, it is also useful to know the risks that a particular company faces. Example: we have identified 1 warning sign for Barrick Gold you should be aware.
Sure, you might find a fantastic investment by looking elsewhere. So take a look at this free list of interesting companies.
For the purposes of this article, insiders are persons who report their transactions to the relevant regulatory body. We currently record open market transactions and private dispositions, but not derivative transactions.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.