It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Ascendant Resources Inc. (TSE:ASND), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. 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'.
Ascendant Resources Insider Transactions Over The Last Year
In fact, the recent purchase by Stephen Shefsky was the biggest purchase of Ascendant Resources shares made by an insider individual in the last twelve months, according to our records. That implies that an insider found the current price of CA$0.22 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for Ascendant Resources share holders is that an insider was buying at near the current price. The only individual insider to buy over the last year was Stephen Shefsky. We note that Stephen Shefsky was also the biggest seller.
Stephen Shefsky bought a total of 464.11k shares over the year at an average price of CA$0.21. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insiders at Ascendant Resources Have Bought Stock Recently
Over the last three months, we've seen a bit of insider buying at Ascendant Resources. Independent Lead Director Stephen Shefsky bought CA$99k worth in that time. However, Independent Lead Director Stephen Shefsky netted CA$77k for sales. It is nice to see that insiders have bought, but the quantum isn't large enough to get us excited.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 23% of Ascendant Resources shares, worth about CA$4.8m. 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 Ascendant Resources Tell Us?
Our data shows a little insider buying, but no selling, in the last three months. Overall the buying isn't worth writing home about. But insiders have shown more of an appetite for the stock, over the last year. Insiders own shares in Ascendant Resources and we see no evidence to suggest they are worried about the future. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example - Ascendant Resources has 3 warning signs we think you should be aware of.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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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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. 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.
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