Saputo Insiders Sell CA$1.1b Of Stock, Possibly Signalling Caution

The fact that multiple Saputo Inc. (TSE:SAP) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, if numerous insiders are selling, shareholders should investigate more.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Saputo

The Last 12 Months Of Insider Transactions At Saputo

In the last twelve months, the biggest single sale by an insider was when the insider, Francesco Saputo, sold CA$1.1b worth of shares at a price of CA$29.12 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (CA$26.22). So it may not tell us anything about how insiders feel about the current share price.

Over the last year, we can see that insiders have bought 26.56m shares worth CA$766m. On the other hand they divested 40.00m shares, for CA$1.1b. Over the last year we saw more insider selling of Saputo shares, than buying. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Saputo Insiders Are Selling The Stock

We've seen more insider selling than insider buying at Saputo recently. In total, insiders sold CA$1.1b worth of shares in that time. On the flip side, insiders spent CA$765m on purchasing shares. We don't view these transactions as a positive sign.

Does Saputo Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Saputo insiders own about CA$4.4b worth of shares (which is 38% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Saputo Insiders?

The insider sales have outweighed the insider buying, at Saputo, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Saputo. To assist with this, we've discovered 5 warning signs that you should run your eye over to get a better picture of Saputo.

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.