We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Winpak Ltd. (TSE:WPK), you may well want to know whether insiders have been buying or selling.
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.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.
The Last 12 Months Of Insider Transactions At Winpak
Over the last year, we can see that the biggest insider sale was by the Director, Ilkka Suominen, for CA$525k worth of shares, at about CA$45.88 per share. So what is clear is that an insider saw fit to sell at around the current price of CA$43.07. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.
In the last twelve months insiders purchased 2800 shares for CA$117k. But they sold 26057 for CA$1.2m. In total, Winpak insiders sold more than they bought over the last year. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Winpak better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Does Winpak Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data suggests Winpak insiders own 0.2% of the company, worth about CA$6.1m. But they may have an indirect interest through a corporate structure that we haven’t picked up on. We consider this fairly low insider ownership.
So What Do The Winpak Insider Transactions Indicate?
It doesn’t really mean much that no insider has traded Winpak shares in the last quarter. The insider transactions at Winpak are not inspiring us to buy. And we’re not picking up on high enough insider ownership to give us any comfort. Of course, the future is what matters most. So if you are interested in Winpak, you should check out this free report on analyst forecasts for the company.
But note: Winpak 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, 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 email@example.com. 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.