We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we’ll take a look at whether insiders have been buying or selling shares in Strategem Capital Corporation (CVE:SGE).
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.
Strategem Capital Insider Transactions Over The Last Year
Notably, that recent purchase by insider Arthur Smolensky was not the only time they traded Strategem Capital shares this year. Earlier in the year, they sold shares at a price ofCA$1.77 per share in a -CA$177.0k transaction. So we know that an insider sold shares at around the present share price of CA$1.52. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.
Arthur Smolensky ditched 110000 shares over the year. The average price per share was CA$1.76. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, 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 Strategem Capital better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Have Strategem Capital Insiders Traded Recently?
We saw some Strategem Capital insider buying shares in the last three months. insider Arthur Smolensky shelled out CA$10k for shares in that time. It’s good to see the insider buying, as well as the lack of recent sellers. However, in this case the amount invested recently is quite small.
Does Strategem Capital Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Strategem Capital insiders own about CA$5.0m worth of shares (which is 77% 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 Do The Strategem Capital Insider Transactions Indicate?
Our data shows a little insider buying, but no selling, in the last three months. The net investment is not enough to encourage us much. It’s heartening that insiders own plenty of stock, but we’d like to see more insider buying, since the last year of Strategem Capital insider transactions don’t fill us with confidence. I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow for free.
Of course Strategem Capital 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, but not derivative transactions.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned.
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