Innovotech Gains 13%, Insider Trades Reap Benefit

Innovotech Inc. (CVE:IOT) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 13% resulting in a CA$1.2m addition to the company’s market value. In other words, the original CA$446.0k purchase is now worth CA$744.8k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Innovotech

Innovotech Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Independent Director Shong-Tak Tam bought CA$153k worth of shares at a price of CA$0.13 per share. We do like to see buying, but this purchase was made at well below the current price of CA$0.21. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

In the last twelve months insiders purchased 3.46m shares for CA$446k. But insiders sold 82.50k shares worth CA$15k. Overall, Innovotech insiders were net buyers during the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Are Innovotech Insiders Buying Or Selling?

Over the last three months, we've seen a bit of insider selling at Innovotech. Chairman & Secretary James Timourian sold CA$15k worth of shares in that time. But at least we saw CA$3.1k worth of buying. While it's not great to see insider selling, the net amount sold isn't enough for us to want to read anything into it.

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Innovotech insiders own about CA$4.0m worth of shares (which is 41% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Innovotech Insider Transactions Indicate?

Our data shows a little more insider selling than buying in the last three months. But the difference is small, and thus, not concerning. But insiders have shown more of an appetite for the stock, over the last year. With high insider ownership and encouraging transactions, it seems like Innovotech insiders think the business has merit. 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. At Simply Wall St, we've found that Innovotech has 4 warning signs (2 can't be ignored!) that deserve your attention before going any further with your analysis.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.