Toromont Industries Insiders Sell CA$964k Of Stock, Possibly Signalling Caution

Quite a few Toromont Industries Ltd. (TSE:TIH) insiders sold their shares over the past year, which may be a cause for concern. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Toromont Industries

The Last 12 Months Of Insider Transactions At Toromont Industries

In the last twelve months, the biggest single sale by an insider was when the President of CIMCO Refrigeration, David Malinauskas, sold CA$651k worth of shares at a price of CA$113 per share. That means that even when the share price was slightly below the current price of CA$114, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 41% of David Malinauskas's stake.

Happily, we note that in the last year insiders paid CA$477k for 14.20k shares. But they sold 8.54k shares for CA$964k. In total, Toromont Industries insiders sold more than they bought over the last year. The average sell price was around CA$113. It's not too encouraging to see that insiders have sold at below the current price. But we wouldn't put too much weight on the insider selling. 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!

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Insiders At Toromont Industries Have Bought Stock Recently

There was some insider buying at Toromont Industries over the last quarter. Independent Director Frederick Mifflin bought CA$76k worth of shares in that time. But Chief Operating Officer - Toromont Cat Joel Couture sold CA$40k worth. It is good to see that insiders have been buying, but they did not buy very many shares, in the scheme of things.

Insider Ownership Of Toromont Industries

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 appears that Toromont Industries insiders own 0.4% of the company, worth about CA$38m. 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 Does This Data Suggest About Toromont Industries Insiders?

We note a that there has been a bit of insider buying recently (but no selling). That said, the purchases were not large. Recent insider selling makes us a little nervous, in light of the broader picture of Toromont Industries insider transactions. But we do like the fact that insiders own a fair chunk of the company. Of course, the future is what matters most. So if you are interested in Toromont Industries, you should check out this free report on analyst forecasts for the company.

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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 of direct interests only, but not derivative transactions or indirect interests.

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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.