Did Home Capital Group Inc. (TSE:HCG) Insiders Buy Up More Shares?

We often see insiders buying up shares in companies that perform well over the long term. 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 Home Capital Group Inc. (TSE:HCG).

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, 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 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'.

View our latest analysis for Home Capital Group

Home Capital Group Insider Transactions Over The Last Year

The Senior Vice President of Commercial Real Estate Lending James Pelletier made the biggest insider purchase in the last 12 months. That single transaction was for CA$106k worth of shares at a price of CA$28.32 each. So it's clear an insider wanted to buy, at around the current price, which is CA$32.50. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the Home Capital Group insiders decided to buy shares at close to current prices. We note that James Pelletier was both the biggest buyer and the biggest seller.

In the last twelve months insiders purchased 19.35k shares for CA$434k. But they sold 1.98k shares for CA$56k. Overall, Home Capital Group insiders were net buyers during the last year. They paid about CA$22.43 on average. To my mind it is good that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Home Capital Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Home Capital Group Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Home Capital Group. Specifically, Independent Director James Lisson bought CA$89k worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.

Insider Ownership of Home Capital Group

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. It's great to see that Home Capital Group insiders own 7.9% of the company, worth about CA$132m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Home Capital Group Tell Us?

It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Home Capital Group. Looks promising! Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Home Capital Group.

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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