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 K-Bro Linen Inc. (TSE:KBL), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
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.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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.’
K-Bro Linen Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by President Linda McCurdy for CA$1.2m worth of shares, at about CA$39.10 per share. That means that an insider was selling shares at around the current price of CA$37.55. While their view may have changed since the sale, this is not a particularly positive fact. We generally tread carefully if insiders have been selling on market, even if they sold slightly above the current price.
In the last twelve months insiders purchased 9.00k shares for CA$305k. But they sold 63.34k for CA$2.5m. Over the last year we saw more insider selling of K-Bro Linen shares, than buying. They sold for an average price of about CA$38.78. We don’t gain confidence from insider selling below the recent share price. But we wouldn’t put too much weight on the insider selling. 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 alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
K-Bro Linen Insiders Bought Stock Recently
We saw some K-Bro Linen insider buying shares in the last three months. Steven Matyas bought CA$98k worth of shares in that time. However, General Manager of Calgary Plant Jeffrey Gannon netted CA$39k for sales. It is nice to see that insiders have bought, but the quantum isn’t large enough to get us excited.
Does K-Bro Linen Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data indicates that K-Bro Linen insiders own about CA$12m worth of shares (which is 3.2% of the company). Overall, this level of ownership isn’t that impressive, but it’s certainly better than nothing!
What Might The Insider Transactions At K-Bro Linen Tell Us?
It’s certainly positive to see the recent insider purchase. However, the longer term transactions are not so encouraging. The more recent transactions are a positive, but K-Bro Linen insiders haven’t shown the sustained enthusiasm that we look for, although they do own a decent number of shares, overall. So they seem pretty well aligned, overall. Of course, the future is what matters most. So if you are interested in K-Bro Linen, you should check out this free report on analyst forecasts for the company.
But note: K-Bro Linen may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.