Read This Before Selling Canstar Resources Inc. (CVE:ROX) Shares

It is not uncommon to see companies perform well in the years after insiders buy shares. 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 we'll take a look at whether insiders have been buying or selling shares in Canstar Resources Inc. (CVE:ROX).

What Is Insider Selling?

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.

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'.

Check out our latest analysis for Canstar Resources

The Last 12 Months Of Insider Transactions At Canstar Resources

The Chairman Dennis Peterson made the biggest insider purchase in the last 12 months. That single transaction was for CA$125k worth of shares at a price of CA$0.05 each. Even though the purchase was made at a significantly lower price than the recent price (CA$0.25), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

Happily, we note that in the last year insiders paid CA$398k for 5.37m shares. On the other hand they divested 125.00k shares, for CA$31k. In the last twelve months there was more buying than selling by Canstar Resources insiders. Their average price was about CA$0.074. We don't deny that it is nice to see insiders buying stock in the company. But we must note that the investments were made at well below today's share price. 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!

Canstar Resources is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Have Canstar Resources Insiders Traded Recently?

There was only a small bit of insider buying, worth CA$5.9k, in the last three months. So it is hard to draw any conclusion about how insiders are feeling about the stock, from these recent trades.

Does Canstar Resources Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. From our data, it seems that Canstar Resources insiders own 12% of the company, worth about CA$2.1m. Whilst better than nothing, we're not overly impressed by these holdings.

What Might The Insider Transactions At Canstar Resources Tell Us?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. That said, the purchases were not large. On a brighter note, the transactions over the last year are encouraging. We'd like to see bigger individual holdings. However, we don't see anything to make us think Canstar Resources insiders are doubting the company. 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. Be aware that Canstar Resources is showing 4 warning signs in our investment analysis, and 2 of those shouldn't be ignored...

But note: Canstar Resources 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.

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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