Are Insiders Buying Home Capital Group Inc. (TSE:HCG) Stock?

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Home Capital Group Inc. (TSE:HCG), you may well want to know whether insiders have been buying or selling.

What Is Insider Buying?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. 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 logic dictates you should pay some attention to whether insiders are buying or selling shares. 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'.

See our latest analysis for Home Capital Group

Home Capital Group Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Senior Vice President of Commercial Real Estate Lending James Pelletier bought CA$106k worth of shares at a price of CA$28.32 per share. That implies that an insider found the current price of CA$29.78 per share to be enticing. 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. Happily, the Home Capital Group insiders decided to buy shares at close to current prices. Notably James Pelletier was also the biggest seller.

In the last twelve months insiders purchased 18.35k shares for CA$388k. On the other hand they divested 1.98k shares, for CA$56k. Overall, Home Capital Group insiders were net buyers during the last year. They paid about CA$21.12 on average. We don't deny that it is nice to see insiders buying stock in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Home Capital Group Insiders Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at Home Capital Group. Senior Vice President of Commercial Real Estate Lending James Pelletier bought CA$106k worth of shares in that time. On the other hand, Senior Vice President of Commercial Real Estate Lending James Pelletier sold CA$56k worth of shares. It is good to see that insiders have been buying, but they did not buy very many shares, in the scheme of things.

Does Home Capital Group Boast High Insider Ownership?

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 appears that Home Capital Group insiders own 7.8% of the company, worth about CA$121m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Home Capital Group Insider Transactions Indicate?

It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Home Capital Group. One for the watchlist, at least! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Home Capital Group. For example - Home Capital Group has 1 warning sign we think you should be aware of.

But note: Home Capital 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.

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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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