Definity Financial Insiders Sold CA$1.2m Of Shares Suggesting Hesitancy

The fact that multiple Definity Financial Corporation (TSE:DFY) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, if numerous insiders are selling, shareholders should investigate more.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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Definity Financial Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Liam McFarlane, for CA$774k worth of shares, at about CA$49.01 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of CA$79.37. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 23% of Liam McFarlane's holding.

Happily, we note that in the last year insiders paid CA$399k for 7.22k shares. But insiders sold 24.68k shares worth CA$1.2m. All up, insiders sold more shares in Definity Financial than they bought, over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Check out our latest analysis for Definity Financial

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).

Insider Ownership Of Definity Financial

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. Insiders own 1.1% of Definity Financial shares, worth about CA$107m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Definity Financial Tell Us?

It doesn't really mean much that no insider has traded Definity Financial shares in the last quarter. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Definity Financial insiders selling. Of course, the future is what matters most. So if you are interested in Definity Financial, you should check out this free report on analyst forecasts for the company.

Of course Definity Financial may not be the best stock to buy. So you may wish to see this free collection of high quality 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.