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 Canfor Pulp Products Inc. (TSE:CFX), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
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 Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.
The Last 12 Months Of Insider Transactions At Canfor Pulp Products
Over the last year, we can see that the biggest insider purchase was by insider Måns Johansson for CA$801k worth of shares, at about CA$7.42 per share. We do like to see buying, but this purchase was made at well below the current price of CA$9.19. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
Happily, we note that in the last year insiders paid CA$842k for 116.00k shares. On the other hand they divested 20.00k shares, for CA$141k. In total, Canfor Pulp Products insiders bought more than they sold 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!
Canfor Pulp Products is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Canfor Pulp Products
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 1.8% of Canfor Pulp Products shares, worth about CA$11m, according to our data. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
So What Do The Canfor Pulp Products Insider Transactions Indicate?
There haven't been any insider transactions in the last three months -- that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. Insiders own shares in Canfor Pulp Products and we see no evidence to suggest they are worried about the future. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Canfor Pulp Products.
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, but not derivative transactions.
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