We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Golden Entertainment, Inc. (NASDAQ:GDEN).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year’.
Check out our latest analysis for Golden Entertainment
Golden Entertainment Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Independent Director Robert Miodunski bought US$119k worth of shares at a price of US$5.31 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$19.95. Because it occurred at a lower valuation, it doesn’t tell us much about whether insiders might find today’s price attractive.
Happily, we note that in the last year insiders paid US$189k for 37.50k shares. On the other hand they divested 9.00k shares, for US$91k. Overall, Golden Entertainment insiders were net buyers during the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insider Ownership of Golden Entertainment
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Golden Entertainment insiders own about US$62m worth of shares. That equates to 11% of the company. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About Golden Entertainment Insiders?
The fact that there have been no Golden Entertainment insider transactions recently certainly doesn’t bother us. However, our analysis of transactions over the last year is heartening. Insiders own shares in Golden Entertainment and we see no evidence to suggest they are worried about the future. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing Golden Entertainment. In terms of investment risks, we’ve identified 1 warning sign with Golden Entertainment and understanding it should be part of your investment process.
But note: Golden Entertainment 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.
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