We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in Village Farms International, Inc. (TSE:VFF).
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, most countries require that the company discloses such transactions to the market.
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’.
Village Farms International Insider Transactions Over The Last Year
The Founder, Michael DeGiglio, made the biggest insider sale in the last 12 months. That single transaction was for CA$1.6m worth of shares at a price of CA$20.16 each. While we don’t usually like to see insider selling, it’s more concerning if the sales take price at a lower price. It’s of some comfort that this sale was conducted at a price well above the current share price, which is CA$15.18. So it may not shed much light on insider confidence at current levels.
Over the last year we saw more insider selling of Village Farms International shares, than buying. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Village Farms International better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insiders at Village Farms International Have Sold Stock Recently
Over the last three months, we’ve seen significant insider selling at Village Farms International. In total, insiders sold US$3.1m worth of shares in that time, and we didn’t record any purchases whatsoever. Overall this makes us a bit cautious, but it’s not the be all and end all.
Does Village Farms International 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. Village Farms International insiders own about CA$160m worth of shares (which is 21% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Village Farms International Insider Transactions Indicate?
Insiders sold Village Farms International shares recently, but they didn’t buy any. 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. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Village Farms International.
But note: Village Farms International 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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