Don't Ignore The Insider Selling In Propel Holdings

We wouldn't blame Propel Holdings Inc. (TSE:PRL) shareholders if they were a little worried about the fact that Michael Stein, the Independent Chair of the Board recently netted about CA$10.0m selling shares at an average price of CA$20.00. However, that sale only accounted for 9.0% of their holding, so arguably it doesn't say much about their conviction.

View our latest analysis for Propel Holdings

The Last 12 Months Of Insider Transactions At Propel Holdings

The Co-Founder, Clive Kinross, made the biggest insider sale in the last 12 months. That single transaction was for CA$15m worth of shares at a price of CA$14.72 each. That means that an insider was selling shares at slightly below the current price (CA$23.95). 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. 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. This single sale was just 16% of Clive Kinross's stake.

Over the last year, we can see that insiders have bought 7.00k shares worth CA$88k. But they sold 2.66m shares for CA$49m. All up, insiders sold more shares in Propel Holdings than they bought, over the last year. They sold for an average price of about US$18.60. We don't gain confidence from insider selling below the recent share price. Of course, the sales could be motivated for a multitude of reasons, so we shouldn't jump to conclusions. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like Propel Holdings 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.

Does Propel Holdings Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Propel Holdings insiders own 40% of the company, currently worth about CA$331m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Propel Holdings Tell Us?

The insider sales have outweighed the insider buying, at Propel Holdings, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. On the plus side, Propel Holdings makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we've found that Propel Holdings has 4 warning signs (2 don't sit too well with us!) that deserve your attention before going any further with your analysis.

Of course Propel Holdings may not be the best stock to buy. So you may wish to see this free collection of high quality 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.