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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 shareholders might well want to know whether insiders have been buying or selling shares in Gear Energy Ltd. (TSE:GXE).
What Is Insider Buying?
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, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
The Last 12 Months Of Insider Transactions At Gear Energy
In the last twelve months, the biggest single sale by an insider was when the Director, John O’Connell, sold CA$98k worth of shares at a price of CA$0.78 per share. We generally don’t like to see insider selling, but the lower the sale price, the more it concerns us. It’s of some comfort that this sale was conducted at a price well above the current share price, which is CA$0.57. So it may not shed much light on insider confidence at current levels.
Happily, we note that in the last year insiders paid CA$97k for 160k shares. But insiders sold 145k shares worth CA$120k. In total, Gear Energy insiders sold more than they bought over the last year. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Gear Energy Insiders Are Selling The Stock
We have seen a bit of insider selling at Gear Energy, over the last three months. John O’Connell sold CA$98k worth of shares in that time. But the good news is that there was purchasing too , worth CA$65k. While it’s not great to see insider selling, the net amount sold isn’t enough for us to want to read anything into it.
Insider Ownership of Gear Energy
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Insiders own 7.6% of Gear Energy shares, worth about CA$9.4m, according to our data. Overall, this level of ownership isn’t that impressive, but it’s certainly better than nothing!
So What Do The Gear Energy Insider Transactions Indicate?
Insider selling has just outweighed insider buying in the last three months. But the difference isn’t enough to have us worried. Recent sales exacerbate our caution arising from analysis of Gear Energy insider transactions. And we’re not picking up on high enough insider ownership to give us any comfort. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Gear Energy.
But note: Gear Energy 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 aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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. Thank you for reading.