How Much Are CHAR Technologies Ltd. (CVE:YES) Insiders Taking Off The Table?

We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell CHAR Technologies Ltd. (CVE:YES), you may well want to know whether insiders have been buying or selling.

What Is Insider Buying?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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 CHAR Technologies

The Last 12 Months Of Insider Transactions At CHAR Technologies

Over the last year, we can see that the biggest insider sale was by the Independent Director, James Sbrolla, for CA$192k worth of shares, at about CA$0.32 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of CA$0.62. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 11% of James Sbrolla's holding. James Sbrolla was the only individual insider to sell over the last year. Notably James Sbrolla was also the biggest buyer, having purchased CA$206k worth of shares.

Happily, we note that in the last year insiders paid CA$206k for 2.05m shares. On the other hand they divested 1.27m shares, for CA$359k. James Sbrolla ditched 1.27m shares over the year. The average price per share was CA$0.28. You can see the insider transactions (by companies and 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 are like me, then you will not want to miss this free list of growing companies that insiders are buying.

CHAR Technologies Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at CHAR Technologies. In total, Independent Director James Sbrolla dumped CA$359k 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 of CHAR Technologies

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. CHAR Technologies insiders own about CA$11m worth of shares. That equates to 24% 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 CHAR Technologies Tell Us?

An insider sold stock recently, but they haven't been buying. And our longer term analysis of insider transactions didn't bring confidence, either. While insiders do own shares, they don't own a heap, and they have been selling. We're in no rush to buy! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. At Simply Wall St, we've found that CHAR Technologies has 6 warning signs (2 are a bit concerning!) that deserve your attention before going any further with your analysis.

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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