We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we’ll take a look at whether insiders have been buying or selling shares in CanWel Building Materials Group Ltd. (TSE:CWX).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. 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 CanWel Building Materials Group
Over the last year, we can see that the biggest insider purchase was by President & Director Marc Séguin for CA$169k worth of shares, at about CA$4.34 per share. That means that an insider was happy to buy shares at around the current price of CA$5.17. Of course they may have changed their mind. But this suggests they are optimistic. While we always like to see insider buying, it’s less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. In this case we’re pleased to report that the insider purchases were made at close to current prices.
In the last twelve months insiders purchased 122690 shares for CA$542k. But insiders sold 72275 shares worth CA$323k. In the last twelve months there was more buying than selling by CanWel Building Materials Group insiders. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
CanWel Building Materials Group is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
CanWel Building Materials Group Insiders Bought Stock Recently
It’s good to see that CanWel Building Materials Group insiders have made notable investments in the company’s shares. Overall, two insiders shelled out CA$221k for shares in the company — and none sold. That shows some optimism about the company’s future.
Does CanWel Building Materials Group Boast High Insider Ownership?
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. From our data, it seems that CanWel Building Materials Group insiders own 2.9% of the company, worth about CA$12m. We do generally prefer see higher levels of insider ownership.
So What Does This Data Suggest About CanWel Building Materials Group Insiders?
The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. Insiders likely see value in CanWel Building Materials Group shares, given these transactions (along with notable insider ownership of the company). 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.
But note: CanWel Building Materials Group 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.
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.
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