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 Cathedral Energy Services Ltd (TSE:CET).
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 on the market. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Colombia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
Cathedral Energy Services Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Dan Wilks bought CA$809k worth of shares at a price of CA$1.85 per share. That means that even when the share price was higher, an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. We generally consider it a positive if insiders have been buying on market, even above the current price.
Over the last year, we can see that insiders have bought 524.00k shares worth CA$902k. In the last twelve months there was more buying than selling by Cathedral Energy Services insiders. Their average price was about CA$1.72. I’d consider this a positive as it suggests insiders see value at around the current price, which is CA$0.73. You can see a visual depiction of insider transactions 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!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Cathedral Energy Services Insiders Bought Stock Recently
Over the last three months, we’ve seen a bit of insider buying at Cathedral Energy Services. Insiders bought CA$42k worth of 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 Cathedral Energy Services Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. It’s good to see that Cathedral Energy Services insiders own 24% of the company, worth about CA$6.5m. While this is strong but not in the top group, when it comes to insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Cathedral Energy Services Tell Us?
Our data shows a little more insider buying than selling in the last three months. But the net investment is not enough to encourage us much. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Cathedral Energy Services and their transactions don’t cause us concern. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course Cathedral Energy Services may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.