It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Alimentation Couche-Tard Inc. (TSE:ATD.B).
Do Insider Transactions Matter?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
We don’t think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
The Last 12 Months Of Insider Transactions At Alimentation Couche-Tard
Over the last year, we can see that the biggest insider sale was by the Co-Founder & Corporate Director, Richard Fortin, for CA$9.9m worth of shares, at about CA$65.88 per share. That means that an insider was selling shares at slightly below the current price (CA$82.71). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it’s only a weak signal. It is worth noting that this sale was only 17.8% of Richard Fortin’s holding.
In the last twelve months insiders purchased 7250 shares for CA$515k. But they sold 219k for CA$14m. In total, Alimentation Couche-Tard insiders sold more than they bought over the last year. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Insiders at Alimentation Couche-Tard Have Bought Stock Recently
Over the last three months, we’ve seen significantly more insider buying, than insider selling, at Alimentation Couche-Tard. Insiders spent US$207k on shares. But Independent Corporate Director Jean Élie sold shares worth US$126k. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.
Insider Ownership of Alimentation Couche-Tard
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. It’s great to see that Alimentation Couche-Tard insiders own 5.5% of the company, worth about CA$2.6b. 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 Alimentation Couche-Tard Insider Transactions Indicate?
It is good to see recent purchasing. On the other hand the transaction history, over the last year, isn’t so positive. The high levels of insider ownership, and the recent buying by some insiders, suggests they are well aligned and optimistic. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity 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, but not derivative transactions.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.