Insiders may have sold Razor Energy Corp. (CVE:RZE) early at CA$1.35 per share, while current price continues to trade high at CA$3.13

Simply Wall St
March 18, 2022
Source: Shutterstock

Razor Energy Corp.'s (CVE:RZE) stock price has dropped 12% in the previous week, but insiders who sold CA$152k in stock over the past year have had less luck. Insiders would probably have been better off holding on to their shares given that the average selling price of CA$1.35 is still lower than the current share price.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Razor Energy

Razor Energy Insider Transactions Over The Last Year

In fact, the recent sale by Stephen Sych was the biggest sale of Razor Energy shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at slightly below the current price (CA$3.13). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 13% of Stephen Sych's stake.

Over the last year, we can see that insiders have bought 66.03k shares worth CA$61k. On the other hand they divested 113.01k shares, for CA$152k. Stephen Sych sold a total of 113.01k shares over the year at an average price of CA$1.35. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

TSXV:RZE Insider Trading Volume March 18th 2022

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insiders at Razor Energy Have Sold Stock Recently

There was substantially more insider selling, than buying, of Razor Energy shares over the last three months. We note insider Stephen Sych cashed in CA$152k worth of shares. On the flip side, insiders spent CA$16k on purchasing shares. Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the company has been fully valued in recent months.

Insider Ownership of Razor Energy

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Razor Energy insiders own 22% of the company, worth about CA$16m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Razor Energy Insider Transactions Indicate?

The insider sales have outweighed the insider buying, at Razor Energy, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Case in point: We've spotted 7 warning signs for Razor Energy you should be aware of, and 3 of them don't sit too well with us.

But note: Razor 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 currently account for open market transactions and private dispositions, but not derivative transactions.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.