Maple Leaf Foods Insiders Sell CA$2.4m Of Stock, Possibly Signalling Caution

Many Maple Leaf Foods Inc. (TSE:MFI) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Maple Leaf Foods

Maple Leaf Foods Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Chief Information & Technology Officer, Andreas Liris, sold CA$1.2m worth of shares at a price of CA$30.40 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of CA$23.19. So it may not tell us anything about how insiders feel about the current share price.

In the last twelve months insiders purchased 35.95k shares for CA$902k. But insiders sold 83.14k shares worth CA$2.4m. All up, insiders sold more shares in Maple Leaf Foods than they bought, over the last year. The sellers received a price of around CA$28.51, on average. Insider selling doesn't make us excited to buy. However, we do note that the average sale price was significantly higher than the current share price (which is CA$23.19). The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Does Maple Leaf Foods Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Maple Leaf Foods insiders own about CA$1.2b worth of shares (which is 40% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Maple Leaf Foods Tell Us?

It doesn't really mean much that no insider has traded Maple Leaf Foods shares in the last quarter. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Maple Leaf Foods insider transactions don't fill us with confidence. 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 3 warning signs for Maple Leaf Foods you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.