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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 before you buy or sell Canada House Wellness Group Inc. (CNSX:CHV), 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.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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.’
Canada House Wellness Group Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Michael Southwell for CA$500k worth of shares, at about CA$0.12 per share. So it’s clear an insider wanted to buy, at around the current price, which is CA$0.12. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today’s share price, as the discount to value may have narrowed with the rising price. Happily, the Canada House Wellness Group insiders decided to buy shares at close to current prices.
Over the last year, we can see that insiders have bought 5.0m shares worth CA$663k. While Canada House Wellness Group insiders bought shares last year, they didn’t sell. The average buy price was around CA$0.13. I’d consider this a positive as it suggests insiders see value at around the current price. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
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. Insiders own 25% of Canada House Wellness Group shares, worth about CA$6.8m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Canada House Wellness Group Tell Us?
It doesn’t really mean much that no insider has traded Canada House Wellness Group shares in the last quarter. However, our analysis of transactions over the last year is heartening. Overall we don’t see anything to make us think Canada House Wellness Group insiders are doubting the company, and they do own shares. I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow for free .
But note: Canada House Wellness Group 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 aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.