Have Sprott Insiders Been Selling Stock?

Some Sprott Inc. (TSE:SII) shareholders may be a little concerned to see that insider Varinder Bhathal recently sold a substantial CA$2.1m worth of stock at a price of CA$75.06 per share. That sale reduced their total holding by 24% which is hardly insignificant, but far from the worst we've seen.

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Sprott Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Arthur Rule, for CA$4.3m worth of shares, at about CA$57.20 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of CA$77.08. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 2.8% of Arthur Rule's holding.

Happily, we note that in the last year insiders paid CA$3.4m for 57.10k shares. On the other hand they divested 413.55k shares, for CA$25m. Over the last year we saw more insider selling of Sprott shares, than buying. 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!

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Does Sprott 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Sprott insiders own 7.5% of the company, currently worth about CA$149m 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 Sprott Tell Us?

Unfortunately, there has been more insider selling of Sprott stock, than buying, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But since Sprott is profitable and growing, we're not too worried by this. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Sprott.

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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.