Aya Gold & Silver Inc. (TSE:AYA) insiders may have anticipated weakness, ditched US$4.2m worth of stock even though prices were low – Simply Wall St

Aya Gold & Silver Inc.’s (TSE:AYA) value has fallen 8.1% in the last week, but insiders who sold US$4.2m worth of stock over the last year have had less success. Given that the average selling price of US$7.56 is still lower than the current share price, insiders would probably have been better off keeping their shares.

Although we don’t think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Aya Gold & Silver

The Last 12 Months Of Insider Transactions At Aya Gold & Silver

The VP of Legal & Corporate Secretary, Elias Elias, made the biggest insider sale in the last 12 months. That single transaction was for CA$808k worth of shares at a price of CA$7.70 each. So it’s clear an insider wanted to take some cash off the table, even below the current price of CA$8.47. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don’t know for sure what they think of the stock price. We note that the biggest single sale was 64% of Elias Elias’s holding.

Happily, we note that in the last year insiders paid CA$732k for 90.04k shares. But insiders sold 559.27k shares worth CA$4.2m. All up, insiders sold more shares in Aya Gold & Silver than they bought, over the last year. 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!

insider-trading-volume
TSX:AYA Insider Trading Volume November 6th 2021

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Aya Gold & Silver Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Aya Gold & Silver shares. In total, insiders dumped CA$1.2m worth of shares in that time, and we didn’t record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Aya Gold & Silver insiders own 15% of the company, currently worth about CA$133m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Aya Gold & Silver Insider Transactions Indicate?

Insiders haven’t bought Aya Gold & Silver stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn’t bring confidence, either. The company boasts high insider ownership, but we’re a little hesitant, given the history of share sales. 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. You’d be interested to know, that we found 3 warning signs for Aya Gold & Silver and we suggest you have a look.

But note: Aya Gold & Silver 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.

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.

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