How Much Are RediShred Capital Corp. (CVE:KUT) Insiders Spending On Buying Shares?

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 we'll take a look at whether insiders have been buying or selling shares in RediShred Capital Corp. (CVE:KUT).

What Is Insider Selling?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

Check out our latest analysis for RediShred Capital

The Last 12 Months Of Insider Transactions At RediShred Capital

Over the last year, we can see that the biggest insider purchase was by Independent Chairman of the Board Robert Crozier for CA$78k worth of shares, at about CA$0.77 per share. That means that an insider was happy to buy shares at above the current price of CA$0.50. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

In the last twelve months RediShred Capital insiders were buying shares, but not selling. The average buy price was around CA$0.48. It's great to see insiders putting their own cash into the company's stock, albeit at below the recent share price. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insider Ownership of RediShred Capital

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. RediShred Capital insiders own about CA$13m worth of shares. That equates to 33% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The RediShred Capital Insider Transactions Indicate?

It doesn't really mean much that no insider has traded RediShred Capital shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in RediShred Capital and we see no evidence to suggest they are worried about the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing RediShred Capital. To help with this, we've discovered 3 warning signs (1 can't be ignored!) that you ought to be aware of before buying any shares in RediShred Capital.

But note: RediShred Capital 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.

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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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. 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.
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