Have Insiders Been Selling Cresco Labs Inc. (CSE:CL) Shares This Year?

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 shareholders might well want to know whether insiders have been buying or selling shares in Cresco Labs Inc. (CSE:CL).

What Is Insider Buying?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.

We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. 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'.

See our latest analysis for Cresco Labs

The Last 12 Months Of Insider Transactions At Cresco Labs

In the last twelve months, the biggest single sale by an insider was when the Co-Founder & Director, Robert Sampson, sold CA$12m worth of shares at a price of CA$12.50 per share. That means that an insider was selling shares at slightly below the current price (CA$13.66). 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. We note that the biggest single sale was 83% of Robert Sampson's holding.

Over the last year, we can see that insiders have bought 211.00k shares worth CA$655k. On the other hand they divested 4.63m shares, for CA$56m. All up, insiders sold more shares in Cresco Labs than they bought, over the last year. The sellers received a price of around US$12.07, on average. It's not too encouraging to see that insiders have sold at below the current price. Since insiders sell for many reasons, we wouldn't put too much weight on it. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Cresco Labs better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insiders at Cresco Labs Have Sold Stock Recently

We've seen more insider selling than insider buying at Cresco Labs recently. We note insiders cashed in CA$33m worth of shares. On the flip side, insiders spent CA$526k on purchasing shares. We don't view these transactions as a positive sign.

Insider Ownership of Cresco Labs

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Cresco Labs insiders own 29% of the company, currently worth about CA$1.8b based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Cresco Labs Tell Us?

The stark truth for Cresco Labs is that there has been more insider selling than insider 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. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Cresco Labs.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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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