Onex Insiders Sold US$187m Of Shares Suggesting Hesitancy

The fact that multiple Onex Corporation (TSE:ONEX) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, if numerous insiders are selling, shareholders should investigate more.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Onex

Onex Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Vice Chairman Ewout Heersink for CA$96m worth of shares, at about CA$91.47 per share. That means that an insider was happy to buy shares at around the current price of CA$95.22. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. In this case we're pleased to report that the insider bought shares at close to current prices. Ewout Heersink was the only individual insider to buy during the last year. We note that Ewout Heersink was both the biggest buyer and the biggest seller.

All up, insiders sold more shares in Onex than they bought, over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Insiders At Onex Have Sold Stock Recently

Over the last three months, we've seen notably more insider selling, than insider buying, at Onex. In that time, insiders dumped CA$186m worth of shares. On the other hand we note Vice Chairman Ewout Heersink bought CA$96m worth of shares , as previously mentioned . Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the shares are not cheap.

Does Onex Boast High Insider Ownership?

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. Onex insiders own about CA$946m worth of shares (which is 13% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Onex Insiders?

The stark truth for Onex is that there has been more insider selling than insider buying in the last three months. Zooming out, the longer term picture doesn't give us much comfort. On the plus side, Onex makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example, Onex has 2 warning signs (and 1 which can't be ignored) we think you should know about.

But note: Onex 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 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.