Akumin Inc.'s (TSE:AKU) stock has dropped to CA$3.05, but insiders may have sold too soon at a price of only US$2.87 a share

By
Simply Wall St
Published
August 16, 2021
TSX:AKU
Source: Shutterstock

Even though Akumin Inc. (TSE:AKU) has fallen by 20% over the past week , insiders who sold US$520k worth of 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 US$2.87 is still lower than the current share price.

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 Akumin

The Last 12 Months Of Insider Transactions At Akumin

Over the last year, we can see that the biggest insider sale was by the insider, Michael Luckey, for CA$520k worth of shares, at about CA$2.91 per share. That means that an insider was selling shares at slightly below the current price (CA$3.05). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was 56% of Michael Luckey's stake. Michael Luckey was the only individual insider to sell over the last year.

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!

insider-trading-volume
TSX:AKU Insider Trading Volume August 17th 2021

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

Akumin Insiders Bought Stock Recently

There was some insider buying at Akumin over the last quarter. Lead Independent Director Murray Lee purchased CA$18k worth of shares in that period. It's good to see the insider buying, as well as the lack of recent sellers. But the amount invested in the last three months isn't enough for us too put much weight on it, as a single factor.

Does Akumin Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Akumin insiders own about CA$50m worth of shares. That equates to 19% of the company. 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 Does This Data Suggest About Akumin Insiders?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. That said, the purchases were not large. We don't take much encouragement from the transactions by Akumin insiders. The modest level of insider ownership is, at least, some comfort. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Every company has risks, and we've spotted 2 warning signs for Akumin (of which 1 can't be ignored!) you should know about.

But note: Akumin 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.

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