Multiple Insiders Sold New Pacific Metals Shares Presenting Weak Signs For Investors

New Pacific Metals Corp. (TSE:NUAG) shareholders might have a reason to worry after multiple insiders sold their shares over the last year. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

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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New Pacific Metals Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Vice President of Exploration, Yongming Zhang, sold CA$185k worth of shares at a price of CA$3.69 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of CA$4.70. 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 only 7.2% of Yongming Zhang's holding.

All up, insiders sold more shares in New Pacific Metals 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!

Check out our latest analysis for New Pacific Metals

I will like New Pacific Metals better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insiders At New Pacific Metals Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at New Pacific Metals. We can see that insider Yikang Liu paid CA$79k for shares in the company. No-one sold. This could be interpreted as suggesting a positive outlook.

Insider Ownership Of New Pacific Metals

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data indicates that New Pacific Metals insiders own about CA$10m worth of shares (which is 1.2% of the company). Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Does This Data Suggest About New Pacific Metals Insiders?

It is good to see the recent insider purchase. But we can't say the same for the transactions over the last 12 months. The more recent transactions are a positive, but New Pacific Metals insiders haven't shown the sustained enthusiasm that we look for, although they do own a decent number of shares, overall. So they seem pretty well aligned, overall. While it's good to be aware of 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. To that end, you should learn about the 3 warning signs we've spotted with New Pacific Metals (including 2 which can't be ignored).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.