Stock Analysis

    Are Insiders Selling The Supreme Cannabis Company, Inc. (TSE:FIRE) Stock?

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    It is not uncommon to see companies perform well in the years after insiders buy shares. 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 we'll take a look at whether insiders have been buying or selling shares in The Supreme Cannabis Company, Inc. (TSE:FIRE).

    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.

    Insider transactions are not the most important thing when it comes to long-term investing. 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'.

    Check out our latest analysis for Supreme Cannabis Company

    The Last 12 Months Of Insider Transactions At Supreme Cannabis Company

    Over the last year, we can see that the biggest insider sale was by the insider, John Fowler, for CA$1.6m worth of shares, at about CA$1.15 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (CA$0.30). So it may not tell us anything about how insiders feel about the current share price. John Fowler was the only individual insider to sell shares in the last twelve months.

    In the last twelve months insiders purchased 333.45k shares for CA$449k. On the other hand they divested 1493388 shares, for CA$1.6m. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

    TSX:FIRE Recent Insider Trading June 12th 2020
    TSX:FIRE Recent Insider Trading June 12th 2020

    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

    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. Our information indicates that Supreme Cannabis Company insiders own about CA$530k worth of shares. This level of insider ownership is notably low, and not very encouraging.

    So What Does This Data Suggest About Supreme Cannabis Company Insiders?

    There haven't been any insider transactions in the last three months -- that doesn't mean much. The insider transactions at Supreme Cannabis Company are not inspiring us to buy. And we're not picking up on high enough insider ownership to give us any comfort. 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. Case in point: We've spotted 5 warning signs for Supreme Cannabis Company you should be aware of, and 1 of them can't be ignored.

    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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    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. Thank you for reading.