Are Northern Star (ASX:NST) shares cheap? The CEO must think so, here’s how many he snapped up last week

Here’s more on the CEO’s latest purchase.

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The Northern Star Resources Ltd (ASX: NST) share price could be a bargain buy following the CEO’s latest purchase.

The Australian gold miner’s shares have fallen by almost 15% in a month as the price of gold continued to sink. And yesterday’s market session didn’t help, with the company’s share price edging 0.66% lower to $9.04 at the closing bell.

CEO buys more Northern Star shares

Last week, Northern Star managing director and CEO, Stuart Tonkin made an on-market transaction buying more of the company’s shares.

In total, 50,000 Northern Star shares were purchased at an average price of $8.86 per share or $443,000 worth. The sale increase Mr Tonkin’s existing holding by 4.2%, taking advantage of the recent share price weakness.

In addition, non-executive director, John Richards also picked up more Northern Star shares, adding 5,000 to his portfolio. Although, Mr Richards paid a slightly higher price at $9.10 per share.

When news broke out on 6 December, investors sent Northern Star shares around 3% higher over the following two days. However, it wasn’t enough to keep the confidence afloat, with the company’s shares erasing those gains since.

While the Northern Star share price is near these levels, it’s clear that the CEO believes this is an attractive investment.

Furthermore, Swiss investment bank, UBS upgraded its outlook on Northern Star shares last week. Its analysts slapped a “buy” rating from “natural”, but cut the price target by 21% to $11.20 apiece.

Macquarie also jumped in but with a more bullish view, raising the price target by 15% to $15 per share.

Based on the last closing price, this implies an upside of 20% for UBS and 40% for Macquarie.

About the Northern Star share price

Over the last 12 months, Northern Star shares have failed to take off, dropping by almost 30%. Investor sentiment weakened following a sharp fall in the spot price of gold this year.

On valuation grounds, Northern Star commands a market capitalisation of approximately $10.53 billion, with roughly 1.16 billion shares outstanding.

Should you invest $1,000 in Northern Star right now?

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Motley Fool contributor Aaron Teboneras owns Northern Star Resources Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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