We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell The Green Organic Dutchman Holdings Ltd. (TSE:TGOD), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. 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 it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'
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The Last 12 Months Of Insider Transactions At Green Organic Dutchman Holdings
Over the last year, we can see that the biggest insider sale was by Executive Vice President of Operations Jim Shone for CA$1.7m worth of shares, at about CA$8.26 per share. That is hardly a positive sign, even though it took place above the latest price (CA$3.78). So it may not shed much light on insider confidence at current levels.
Over the last year, we can see that insiders have bought 886.50k shares worth CA$3.2m. But insiders sold 1.14m shares worth CA$7.7m. All up, insiders sold more shares in Green Organic Dutchman Holdings than they bought, over the last year. The average sell price was around CA$6.70. We are not joyful about insider selling. But the selling was at much higher prices than the current share price (CA$3.78), so it probably doesn't tell us a lot about the value on offer today. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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Insiders at Green Organic Dutchman Holdings Have Sold Stock Recently
There was substantially more insider selling, than buying, of Green Organic Dutchman Holdings shares over the last three months. In that time, Stephen Dobler dumped CA$1.3m worth of shares. On the other hand we note insiders bought CA$461k worth of shares. Because the selling vastly outweighs the buying, we'd say this is a somewhat bearish sign.
Insider Ownership of Green Organic Dutchman Holdings
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. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Green Organic Dutchman Holdings insiders own 7.8% of the company, worth about CA$79m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Green Organic Dutchman Holdings Tell Us?
The stark truth for Green Organic Dutchman Holdings is that there has been more insider selling than insider buying in the last three months. Zooming out, the longer term picture doesn't give us much comfort. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. So we'd only buy after careful consideration. Therefore, you should should definitely take a look at this FREEreport showing analyst forecasts for Green Organic Dutchman Holdings.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this freelist of interesting companies, that have HIGH return on equity 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.
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