We often see insiders buying up shares in companies that perform well over the long term. 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 Seven Generations Energy Ltd. (TSE:VII).
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, 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 logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia 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’.
The Last 12 Months Of Insider Transactions At Seven Generations Energy
Over the last year, we can see that the biggest insider purchase was by Chairman of the Board Mark Monroe for CA$583k worth of shares, at about CA$9.88 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. That purchase may suggest an expectation of positive returns over the long term.
Happily, we note that in the last year insiders bought 155.38k shares for a total of CA$1.8m. In the last twelve months there was more buying than selling by Seven Generations Energy insiders. The average buy price was around CA$11.44. This is nice to see since it implies that insiders might see value around current prices (around CA$9.54). You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Seven Generations Energy is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Seven Generations Energy Have Bought Stock Recently
It’s good to see that Seven Generations Energy insiders have made notable investments in the company’s shares. In total, insiders bought CA$186k worth of shares in that time, and we didn’t record any sales whatsoever. That shows some optimism about the company’s future.
Does Seven Generations Energy Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It appears that Seven Generations Energy insiders own 0.5% of the company, worth about CA$17m. 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 Seven Generations Energy Insider Transactions Indicate?
It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest Seven Generations Energy insiders are well aligned, and that they may think the share price is too low. 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.
But note: Seven Generations 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.
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