GameSquare Esports Inc.'s (CSE:GSQ) recent CA$3.7m market cap decline means a loss of CA$104k for insiders who bought this year

Simply Wall St
March 22, 2022
Source: Shutterstock

Insiders who acquired CA$186k worth of GameSquare Esports Inc.'s (CSE:GSQ) stock at an average price of CA$0.29 in the past 12 months may be dismayed by the recent 10% price decline. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth CA$82k, which is not what they expected.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for GameSquare Esports

The Last 12 Months Of Insider Transactions At GameSquare Esports

In the last twelve months, the biggest single purchase by an insider was when Director Travis Goff bought CA$137k worth of shares at a price of CA$0.28 per share. That means that an insider was happy to buy shares at above the current price of CA$0.13. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

While GameSquare Esports insiders bought shares during the last year, they didn't sell. 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!

CNSX:GSQ Insider Trading Volume March 22nd 2022

GameSquare Esports is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Does GameSquare Esports Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. From our data, it seems that GameSquare Esports insiders own 9.1% of the company, worth about CA$2.9m. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We do generally prefer see higher levels of insider ownership.

So What Does This Data Suggest About GameSquare Esports Insiders?

The fact that there have been no GameSquare Esports insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. While we have no worries about the insider transactions, we'd be more comfortable if they owned more GameSquare Esports stock. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 4 warning signs for GameSquare Esports (of which 1 is concerning!) you should know about.

But note: GameSquare Esports 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.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.