Selling Gold Hydrogen Shares at a Lower Price Than Current Market Value May Have Been a Costly Mistake for Insiders

Gold Hydrogen Limited's (ASX:GHY) stock price has dropped 10% in the previous week, but insiders who sold AU$4.8m in stock over the past year have had less luck. Insiders would probably have been better off holding on to their shares given that the average selling price of AU$0.54 is still lower than the current share price.

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.

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The Last 12 Months Of Insider Transactions At Gold Hydrogen

Over the last year, we can see that the biggest insider sale was by the insider, John Titus, for AU$2.4m worth of shares, at about AU$0.65 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (AU$0.44). So it is hard to draw any strong conclusion from it. John Titus was the only individual insider to sell shares in the last twelve months.

John Titus ditched 8.86m shares over the year. The average price per share was AU$0.54. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

See our latest analysis for Gold Hydrogen

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Gold Hydrogen Insiders Are Selling The Stock

The last three months saw significant insider selling at Gold Hydrogen. Specifically, insider John Titus ditched AU$1.9m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership Of Gold Hydrogen

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Gold Hydrogen insiders own 46% of the company, currently worth about AU$36m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Gold Hydrogen Insider Transactions Indicate?

An insider hasn't bought Gold Hydrogen stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For instance, we've identified 3 warning signs for Gold Hydrogen (1 makes us a bit uncomfortable) you should be aware of.

But note: Gold Hydrogen 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 of direct interests only, but not derivative transactions or indirect interests.

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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.