Are Insiders Buying Keyera Corp. (TSE:KEY) Stock?

Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!

We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So we’ll take a look at whether insiders have been buying or selling shares in Keyera Corp. (TSE:KEY).

What Is Insider Buying?

It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.

We don’t think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’

Check out our latest analysis for Keyera

Keyera Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Mike Freeman for CA$119k worth of shares, at about CA$37.23 per share. That means that an insider was happy to buy shares at above the current price of CA$33.46. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Happily, we note that in the last year insiders paid CA$165k for 4620 shares. But they sold 600 for CA$22k. Overall, Keyera insiders were net buyers last year. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

TSX:KEY Recent Insider Trading, June 24th 2019
TSX:KEY Recent Insider Trading, June 24th 2019

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.

Keyera Insiders Bought Stock Recently

There was some insider buying at Keyera over the last quarter. Director Janet Woodruff shelled out CA$46k for shares in that time. It’s great to see that insiders are only buying, not selling. But the amount invested in the last three months isn’t enough for us too put much weight on it, as a single factor.

Insider Ownership

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. Keyera insiders own about CA$80m worth of shares. That equates to 1.1% of the company. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Keyera Insider Transactions Indicate?

Our data shows a little insider buying, but no selling, in the last three months. Overall the buying isn’t worth writing home about. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Keyera and their transactions don’t cause us concern. Of course, the future is what matters most. So if you are interested in Keyera, you should check out this free report on analyst forecasts for the company.

Of course Keyera 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 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 editorial-team@simplywallst.com. 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.