Possible Bearish Signals With Onex Insiders Disposing Stock

Many Onex Corporation (TSE:ONEX) 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, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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The Last 12 Months Of Insider Transactions At Onex

Over the last year, we can see that the biggest insider sale was by the Founder & Non-Independent Chairman, Gerald Schwartz, for CA$91m worth of shares, at about CA$90.60 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of CA$114. 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 13% of Gerald Schwartz's holding.

In total, Onex insiders sold more than they bought over the last year. 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!

Check out our latest analysis for Onex

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Onex Insiders Bought Stock Recently

It's good to see that Onex insiders have made notable investments in the company's shares. Independent Director Robert Shanfield spent CA$641k on stock, and there wasn't any selling. That shows some optimism about the company's future.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Onex insiders own about CA$1.0b 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 recent insider purchase is heartening. But we can't say the same for the transactions over the last 12 months. The high levels of insider ownership, and the recent buying by an insider suggests they are well aligned and optimistic. Along with insider transactions, I recommend checking if Onex is growing revenue. This free chart of historic revenue and earnings should make that easy.

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.