We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in SNC-Lavalin Group Inc. (TSE:SNC).
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.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
The Last 12 Months Of Insider Transactions At SNC-Lavalin Group
Over the last year, we can see that the biggest insider purchase was by Independent Director Michael Pedersen for CA$483k worth of shares, at about CA$19.37 per share. We do like to see buying, but this purchase was made at well below the current price of CA$26.71. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
In the last twelve months insiders purchased 45.24k shares for CA$886k. But they sold 12.63k shares for CA$411k. In the last twelve months there was more buying than selling by SNC-Lavalin Group insiders. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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).
Insider Ownership of SNC-Lavalin Group
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data suggests SNC-Lavalin Group insiders own 0.1% of the company, worth about CA$4.9m. We consider this fairly low insider ownership.
So What Do The SNC-Lavalin Group Insider Transactions Indicate?
The fact that there have been no SNC-Lavalin Group insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. While we have no worries about the insider transactions, we'd be more comfortable if they owned more SNC-Lavalin Group stock. 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. At Simply Wall St, we found 1 warning sign for SNC-Lavalin Group that deserve your attention before buying any shares.
Of course SNC-Lavalin Group may not be the best stock to buy. So you may wish to see this free collection of high quality 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.
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