On Tuesday, Kerrisdale Capital Management LLC published a report claiming that Northern Dynasty Minerals' Pebble deposit in Alaska is not commercially viable.
Kerrisdale had a short position in Northern Dynasty and would benefit if the share price fell.
And fall it did, plunging 21.9 per cent on the news. As the stock dropped, two directors spent $87,000 buying shares.
Generally, it is a positive contrarian sign to see insiders buying as a stock falls on bad news as it may suggest the market over-reacted.
Disclaimer:
Ted Dixon is CEO of INK Research which provides insider news and knowledge to investors. For more background on insider reporting in Canada, visit the FAQ section at www.inkresearch.com. Securities referenced in this profile may have already appeared in recent reports distributed to INK subscribers. INK staff may also hold a position in profiled securities.
Graph Footnote: Chart reflects public-market transactions of common shares or unit trusts by company officers and directors.