We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell True Leaf Brands Inc. (CNSX:MJ), you may well want to know whether insiders have been buying or selling.
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 logic dictates you should pay some attention to whether insiders are buying or selling shares. 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’.
The Last 12 Months Of Insider Transactions At True Leaf Brands
In the last twelve months, the biggest single sale by an insider was when the Founder, Darcy Bomford, sold CA$196k worth of shares at a price of CA$0.49 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It’s of some comfort that this sale was conducted at a price well above the current share price, which is CA$0.29. So it may not shed much light on insider confidence at current levels.
Happily, we note that in the last year insiders paid CA$328k for 1.2m shares. On the other hand they divested 510k shares, for CA$229k. Overall, True Leaf Brands insiders were net buyers last year. Their average price was about CA$0.27. It’s great to see insiders putting their own cash into the company’s stock, albeit at below the recent share price. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
True Leaf Brands Insiders Bought Stock Recently
Over the last quarter, True Leaf Brands insiders have spent a meaningful amount on shares. Specifically, Michael Harcourt bought CA$119k worth of shares in that time, and we didn’t record any sales whatsoever. This is a positive in our book as it implies some confidence.
Does True Leaf Brands Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Insiders own 25% of True Leaf Brands shares, worth about CA$7.3m. 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 True Leaf Brands Tell Us?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. But we don’t feel the same about the fact the company is making losses. Insiders likely see value in True Leaf Brands shares, given these transactions (along with notable insider ownership of the company). To put this in context, take a look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .
Of course True Leaf Brands may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.
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