Insiders At Power Corporation of Canada Sold CA$12m In Stock, Alluding To Potential Weakness

Many Power Corporation of Canada (TSE:POW) 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, 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, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Power Corporation of Canada

The Last 12 Months Of Insider Transactions At Power Corporation of Canada

Over the last year, we can see that the biggest insider sale was by the President, Robert Orr, for CA$9.3m worth of shares, at about CA$45.74 per share. So what is clear is that an insider saw fit to sell at around the current price of CA$43.80. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern. Notably Robert Orr was also the biggest buyer, having purchased CA$2.3m worth of shares.

Over the last year, we can see that insiders have bought 60.00k shares worth CA$2.3m. On the other hand they divested 255.60k shares, for CA$12m. In total, Power Corporation of Canada insiders sold more than they bought over the last year. 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!

I will like Power Corporation of Canada better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insiders At Power Corporation of Canada Have Sold Stock Recently

The last three months saw significant insider selling at Power Corporation of Canada. Specifically, President Robert Orr ditched CA$12m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

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. Power Corporation of Canada insiders own about CA$145m worth of shares (which is 0.5% 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 Do The Power Corporation of Canada Insider Transactions Indicate?

An insider hasn't bought Power Corporation of Canada stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. But since Power Corporation of Canada is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 1 warning sign for Power Corporation of Canada you should know about.

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.