We'd be surprised if Tricon Residential Inc. (TSE:TCN) shareholders haven't noticed that the Independent Director, J. Knowlton, recently sold CA$230k worth of stock at CA$15.61 per share. The eyebrow raising move amounted to a reduction of 39% in their holding.
The Last 12 Months Of Insider Transactions At Tricon Residential
Over the last year, we can see that the biggest insider sale was by the Co-Founder & Non Independent Director, Geoffrey Matus, for CA$3.2m worth of shares, at about CA$13.00 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of CA$21.32. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 25% of Geoffrey Matus's holding.
In the last twelve months insiders purchased 215.57k shares for CA$3.7m. But insiders sold 424.06k shares worth CA$5.6m. Over the last year we saw more insider selling of Tricon Residential shares, than buying. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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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. Tricon Residential insiders own 2.7% of the company, currently worth about CA$158m based on the recent share price. 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 Does This Data Suggest About Tricon Residential Insiders?
The insider sales have outweighed the insider buying, at Tricon Residential, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. But it is good to see that Tricon Residential is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. 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. Every company has risks, and we've spotted 5 warning signs for Tricon Residential (of which 2 are a bit unpleasant!) you should know about.
Of course Tricon Residential 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. 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. 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.