James Hays of The Westaim Corporation (CVE:WED) Just Spent US$581k On Shares

Potential The Westaim Corporation (CVE:WED) shareholders may wish to note that insider James Hays recently bought CA$581k worth of stock, paying CA$2.32 for each share. Although the purchase only increased their holding by 3.3%, it is still a solid purchase in our view.

Check out our latest analysis for Westaim

Westaim Insider Transactions Over The Last Year

In fact, the recent purchase by insider James Hays was not their only acquisition of Westaim shares this year. Earlier in the year, they paid CA$1.68 per share in a CA$5.1m purchase. Even though the purchase was made at a significantly lower price than the recent price (CA$2.37), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Happily, we note that in the last year insiders paid CA$17m for 8.87m shares. On the other hand they divested 55.00k shares, for CA$91k. In total, Westaim insiders bought more than they sold over the last year. The average buy price was around CA$1.90. We don't deny that it is nice to see insiders buying stock in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 16% of Westaim shares, worth about CA$53m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Westaim Insider Transactions Indicate?

It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Given that insiders also own a fair bit of Westaim we think they are probably pretty confident of a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Westaim. In terms of investment risks, we've identified 2 warning signs with Westaim and understanding them should be part of your investment process.

But note: Westaim 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, but not derivative transactions.

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