We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Harrys Manufacturing Inc. (CNSX:HARY), you may well want to know whether insiders have been buying or selling.
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.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. 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’.
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The Last 12 Months Of Insider Transactions At Harrys Manufacturing
In the last twelve months, the biggest single sale by an insider was when the , Ashley Harry, sold CA$74k worth of shares at a price of CA$0.18 per share. We generally don’t like to see insider selling, but the lower the sale price, the more it concerns us. It’s of some comfort that this sale was conducted at a price well above the current share price, which is CA$0.07. So it may not shed much light on insider confidence at current levels.
In the last twelve months insiders purchased 8500 shares for CA$2.4k. On the other hand they divested 738k shares, for CA$136k. All up, insiders sold more shares in Harrys Manufacturing than they bought, over the last year. The average sell price was around CA$0.18. Insider selling doesn’t make us excited to buy. However, we do note that the average sale price was significantly higher than the current share price (which is CA$0.07). You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Harrys Manufacturing Insiders Are Selling The Stock
Over the last three months, we’ve seen notably more insider selling, than insider buying, at Harrys Manufacturing. In total, Ashley Harry sold CA$74k worth of shares in that time. On the flip side, Ashley Harry spent CA$186 on purchasing shares. The share price has moved a bit recently, but it’s hard to argue that the selling is a positive.
Does Harrys Manufacturing 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. Harrys Manufacturing insiders own about CA$1.7m worth of shares. That equates to 32% of the company. 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 Harrys Manufacturing Tell Us?
The insider sales have outweighed the insider buying, at Harrys Manufacturing, in the last three months. Despite some insider buying, the longer term picture doesn’t make us feel much more positive. Insiders own shares, but we’re still pretty cautious, given the history of sales. So we’d only buy after careful consideration. To put this in context, take a look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .
But note: Harrys Manufacturing 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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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.