Charles Bachtell Is The Co-Founder of Cresco Labs Inc. (CSE:CL) And Just Spent US$153k On Shares

Investors who take an interest in Cresco Labs Inc. (CSE:CL) should definitely note that the Co-Founder, Charles Bachtell, recently paid CA$1.53 per share to buy CA$153k worth of the stock. Although the purchase is not a big one, by either a percentage standpoint or absolute value, it can be seen as a good sign.

View our latest analysis for Cresco Labs

The Last 12 Months Of Insider Transactions At Cresco Labs

The insider, Joseph Caltabiano, made the biggest insider sale in the last 12 months. That single transaction was for CA$5.1m worth of shares at a price of CA$6.54 each. So it's clear an insider wanted to take some cash off the table, even below the current price of CA$7.56. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was 100% of Joseph Caltabiano's holding. The only individual insider seller over the last year was Joseph Caltabiano.

Over the last year, we can see that insiders have bought 145.08k shares worth CA$512k. But insiders sold 785.00k shares worth CA$5.1m. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Cresco Labs insiders own 19% of the company, worth about CA$417m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Cresco Labs Insider Transactions Indicate?

Unfortunately, there has been more insider selling of Cresco Labs stock, than buying, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Cresco Labs. While conducting our analysis, we found that Cresco Labs has 4 warning signs and it would be unwise to ignore them.

But note: Cresco Labs 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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