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We often see insiders buying up shares in companies that perform well over the long term. 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 THC Biomed Intl Ltd. (CNSX:THC).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
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 Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
See our latest analysis for THC Biomed Intl
THC Biomed Intl Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by Co-Founder Jung Hee for CA$976k worth of shares, at about CA$1.00 per share. While the sale doesn’t make us feel confident, we do note it was conducted at a price well above the current share price, which is CA$0.43. So it may not shed much light on insider confidence at current levels. The only individual insider seller over the last year was Jung Hee.
Jung Hee ditched 4.62m shares over the year. The average price per share was CA$0.46. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
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. I reckon it’s a good sign if insiders own a significant number of shares in the company. THC Biomed Intl insiders own about CA$15m worth of shares. That equates to 27% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About THC Biomed Intl Insiders?
An insider sold stock recently, but they haven’t been buying. And there weren’t any purchases to give us comfort, over the last year. Insiders own shares, but we’re still pretty cautious, given the history of sales. We’d think twice before buying! I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
But note: THC Biomed Intl 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.