Should You Be Worried About Insider Transactions At Calian Group Ltd. (TSE:CGY)?

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We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Calian Group Ltd. (TSE:CGY), 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, most countries require that the company discloses such transactions to the market.

Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. 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.’

See our latest analysis for Calian Group

Calian Group Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Director, Raymond Basler, sold CA$181k worth of shares at a price of CA$33.62 per share. So it’s clear an insider wanted to take some cash off the table, even slightly below the current price of CA$34.26. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don’t know for sure what they think of the stock price. This single sale was just 12.1% of Raymond Basler’s stake. Raymond Basler was the only individual insider to sell over the last year.

Raymond Basler sold a total of 7117 shares over the year at an average price of CA$33.02. You can see a visual depiction of insider transactions (by 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!

TSX:CGY Recent Insider Trading, July 15th 2019
TSX:CGY Recent Insider Trading, July 15th 2019

Insider Ownership

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 Calian Group insiders own 1.3% of the company, worth about CA$3.5m. We prefer to see high levels of insider ownership.

So What Do The Calian Group Insider Transactions Indicate?

An insider hasn’t bought Calian Group stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn’t give us much comfort. When you combine this with the relatively low insider ownership, we are very cautious about the stock. As the saying goes, only fools rush in. Of course, the future is what matters most. So if you are interested in Calian Group, you should check out this free report on analyst forecasts for the company.

Of course Calian 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 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.