We wouldn't blame Hammond Power Solutions Inc. (TSE:HPS.A) shareholders if they were a little worried about the fact that William Hammond, the Chairman & CEO recently netted about CA$1.6m selling shares at an average price of CA$10.80. That sale reduced their total holding by 14% which is hardly insignificant, but far from the worst we've seen.
The Last 12 Months Of Insider Transactions At Hammond Power Solutions
In fact, the recent sale by William Hammond was the biggest sale of Hammond Power Solutions shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at around the current price of CA$10.76. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.
Happily, we note that in the last year insiders paid CA$90k for 13.00k shares. But they sold 166.89k shares for CA$1.8m. In total, Hammond Power Solutions insiders sold more than they bought over the last year. The sellers received a price of around CA$10.69, on average. It's not too encouraging to see that insiders have sold at below the current price. Of course, the sales could be motivated for a multitude of reasons, so we shouldn't jump to conclusions. You can see a visual depiction of insider transactions (by companies and 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!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Hammond Power Solutions insiders own about CA$43m worth of shares. That equates to 34% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Hammond Power Solutions Tell Us?
Unfortunately, there has been more insider selling of Hammond Power Solutions stock, than buying, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. But it is good to see that Hammond Power Solutions is growing earnings. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. In terms of investment risks, we've identified 3 warning signs with Hammond Power Solutions and understanding these should be part of your investment process.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
When trading Hammond Power Solutions or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.Promoted