Insiders At Gildan Activewear Sold US$19m In Stock, Alluding To Potential Weakness

Many Gildan Activewear Inc. (TSE:GIL) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. 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.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Gildan Activewear

The Last 12 Months Of Insider Transactions At Gildan Activewear

Over the last year, we can see that the biggest insider sale was by the President, Glenn Chamandy, for CA$5.5m worth of shares, at about CA$38.30 per share. That means that an insider was selling shares at slightly below the current price (CA$57.10). 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 4.1% of Glenn Chamandy's stake.

Happily, we note that in the last year insiders paid CA$1.1m for 20.87k shares. But insiders sold 466.36k shares worth CA$19m. Over the last year we saw more insider selling of Gildan Activewear shares, than buying. The chart below shows insider transactions (by companies and 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!

I will like Gildan Activewear better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insiders At Gildan Activewear Have Bought Stock Recently

Over the last three months, we've seen significantly more insider buying, than insider selling, at Gildan Activewear. In total, three insiders bought CA$1.1m worth of shares in that time. On the other hand, insiders netted CA$937k by selling. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.

Insider Ownership Of Gildan Activewear

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Gildan Activewear insiders own about CA$92m worth of shares. That equates to 1.0% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Gildan Activewear Insiders?

The recent insider purchases are heartening. On the other hand the transaction history, over the last year, isn't so positive. We don't take much heart from transactions by Gildan Activewear insiders over the last year. But they own a reasonable amount of the company, and there was some buying recently. In short they are likely aligned with shareholders. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example - Gildan Activewear has 2 warning signs we think you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 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.