It is not uncommon to see companies perform well in the years after insiders buy shares. 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 before you buy or sell GABY Inc. (CSE:GABY), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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 GABY
The Last 12 Months Of Insider Transactions At GABY
Over the last year, we can see that the biggest insider purchase was by insider Charles Mannix for CA$250k worth of shares, at about CA$0.083 per share. So it's clear an insider wanted to buy, at around the current price, which is CA$0.10. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. Happily, the GABY insider decided to buy shares at close to current prices. Charles Mannix was the only individual insider to buy during the last year.
Charles Mannix purchased 5.24m shares over the year. The average price per share was CA$0.096. 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!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insider Ownership of GABY
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Insiders own 17% of GABY shares, worth about CA$3.3m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The GABY Insider Transactions Indicate?
It doesn't really mean much that no insider has traded GABY shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think GABY insiders are doubting the company, and they do own shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing GABY. Be aware that GABY is showing 5 warning signs in our investment analysis, and 2 of those are concerning...
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.
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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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About CNSX:GABY
GABY
GABY Inc., together with its subsidiaries, produces, markets, sells, and retails cannabis-related consumer packaged goods in the United States.
Good value with imperfect balance sheet.
