Insiders Find Solace Selling US$865k In Stock With Cresco Labs' Price Down 19%

By selling US$865k worth of Cresco Labs Inc. (CSE:CL) stock at an average sell price of US$1.91 over the last year, insiders seemed to have made the most of their holdings. The company’s market cap plunged by CA$206m after price dropped by 19% last week but insiders were able to limit their loss to an extent.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Cresco Labs

Cresco Labs Insider Transactions Over The Last Year

The Co-Founder & Independent Director, Robert Sampson, made the biggest insider sale in the last 12 months. That single transaction was for CA$554k worth of shares at a price of CA$2.39 each. That means that even when the share price was below the current price of CA$2.49, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 26% of Robert Sampson's holding.

In the last twelve months insiders purchased 178.20k shares for CA$268k. But insiders sold 453.00k shares worth CA$865k. In total, Cresco Labs insiders sold more than they bought over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Cresco Labs Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Cresco Labs shares. In total, Co-Founder & Independent Director Robert Sampson sold CA$554k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Does Cresco Labs Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Cresco Labs insiders own about CA$195m worth of shares (which is 18% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Cresco Labs Tell Us?

An insider sold Cresco Labs shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. It is good to see high insider ownership, but the insider selling leaves us cautious. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example - Cresco Labs has 4 warning signs we think you should be aware of.

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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.