We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in CBD Global Sciences Inc. (CSE:CBDN).
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.
We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.
The Last 12 Months Of Insider Transactions At CBD Global Sciences
Earlier in the year, they sold shares at a price ofCA$0.41 per share in a -CA$348k transaction. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of CA$0.29. So it may not shed much light on insider confidence at current levels.
Jason Garber sold a total of 1.16m shares over the year at an average price of US$0.30. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insiders at CBD Global Sciences Have Sold Stock Recently
We've seen more insider selling than insider buying at CBD Global Sciences recently. In that time, insider Jason Garber dumped CA$348k worth of shares. On the flip side, insider Jason Garber spent CA$220k on purchasing shares (as mentioned above) . We don't view these transactions as a positive sign.
Does CBD Global Sciences Boast High Insider Ownership?
Many investors like to check how much of a company is owned by 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. CBD Global Sciences insiders own about CA$3.9m worth of shares. That equates to 38% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The CBD Global Sciences Insider Transactions Indicate?
The insider sales have outweighed the insider buying, at CBD Global Sciences, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. 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. At Simply Wall St, we've found that CBD Global Sciences has 7 warning signs (3 are a bit unpleasant!) that deserve your attention before going any further with your analysis.
But note: CBD Global Sciences 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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