Need To Know: Hammond Power Solutions Inc. (TSE:HPS.A) Insiders Have Been Selling Shares

We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Hammond Power Solutions Inc. (TSE:HPS.A), you may well want to know whether insiders have been buying or selling.

What Is Insider Selling?

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.

We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'

See our latest analysis for Hammond Power Solutions

Hammond Power Solutions Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the CFO & Corporate Secretary, Christopher Huether, sold CA$99k worth of shares at a price of CA$9.90 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is CA$7.21. So it may not tell us anything about how insiders feel about the current share price. Christopher Huether was the only individual insider to sell over the last year. Notably Christopher Huether was also the biggest buyer, having purchased CA$62k worth of shares.

The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this freelist of companies. (Hint: insiders have been buying them).

Does Hammond Power Solutions 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 Hammond Power Solutions insiders own 34% of the company, worth about CA$29m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Hammond Power Solutions Tell Us?

The fact that there have been no Hammond Power Solutions insider transactions recently certainly doesn't bother us. Our analysis of Hammond Power Solutions insider transactions leaves us cautious. The modest level of insider ownership is, at least, some comfort. I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this freelist of interesting companies.

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 editorial-team@simplywallst.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.