Looking at New Found Gold Corp.'s (CVE:NFG ) insider transactions over the last year, we can see that insiders were net buyers. That is, there were more number of shares purchased by insiders than there were sold.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for New Found Gold

The Last 12 Months Of Insider Transactions At New Found Gold

Over the last year, we can see that the biggest insider purchase was by insider Eric Sprott for CA$5.0m worth of shares, at about CA$5.27 per share. That means that an insider was happy to buy shares at above the current price of CA$3.39. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. The only individual insider to buy over the last year was Eric Sprott.

Eric Sprott bought a total of 1.07m shares over the year at an average price of CA$5.27. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

New Found Gold is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Does New Found Gold Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that New Found Gold insiders own 10% of the company, worth about CA$68m. 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 Do The New Found Gold Insider Transactions Indicate?

It doesn't really mean much that no insider has traded New Found Gold shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders own shares in New Found Gold and we see no evidence to suggest they are worried about the future. 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 4 warning signs we've spotted with New Found Gold (including 1 which is potentially serious).

But note: New Found Gold 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.