Investors who take an interest in goeasy Ltd. (TSE:GSY) should definitely note that the Senior Vice President of Corporate Development & Investor Relations, Farhan Khan, recently paid CA$87.07 per share to buy CA$218k worth of the stock. That certainly has us anticipating the best, especially since they thusly increased their own holding by 2,695%, potentially signalling some real optimism.
goeasy Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Executive Chairman, David Ingram, for CA$3.6m worth of shares, at about CA$72.83 per share. That means that even when the share price was below the current price of CA$86.94, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 8.6% of David Ingram's holding.
Happily, we note that in the last year insiders paid CA$866k for 15.06k shares. But insiders sold 90.84k shares worth CA$6.6m. All up, insiders sold more shares in goeasy than they bought, over the last year. They sold for an average price of about CA$72.36. We don't gain confidence from insider selling below the recent share price. Since insiders sell for many reasons, we wouldn't put too much weight on it. 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!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
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. It's great to see that goeasy insiders own 26% of the company, worth about CA$337m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At goeasy Tell Us?
It's certainly positive to see the recent insider purchases. However, the longer term transactions are not so encouraging. The high levels of insider ownership, and the recent buying by some insiders suggests they are well aligned and optimistic. 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 instance, we've identified 3 warning signs for goeasy (1 is a bit concerning) you should be aware of.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.
If you decide to trade goeasy, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account.
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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email firstname.lastname@example.org.