AutoCanada Independent Director Acquires 24% More Stock

Whilst it may not be a huge deal, we thought it was good to see that the AutoCanada Inc. (TSE:ACQ) Independent Director, Christopher Harris, recently bought CA$93k worth of stock, for CA$18.66 per share. While we're hesitant to get too excited about a purchase of that size, we do note it increased their holding by a solid 24%.

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The Last 12 Months Of Insider Transactions At AutoCanada

In fact, the recent purchase by Independent Director Christopher Harris was not their only acquisition of AutoCanada shares this year. Earlier in the year, they paid CA$13.80 per share in a CA$104k purchase. Even though the purchase was made at a significantly lower price than the recent price (CA$20.80), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

AutoCanada insiders may have bought shares in the last year, but they didn't sell any. The average buy price was around CA$15.59. It is certainly positive to see that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

See our latest analysis for AutoCanada

AutoCanada is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Based on our data, AutoCanada insiders have about 0.5% of the stock, worth approximately CA$2.2m. We prefer to see high levels of insider ownership.

So What Do The AutoCanada Insider Transactions Indicate?

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that AutoCanada insiders are expecting a bright future. 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. Be aware that AutoCanada is showing 3 warning signs in our investment analysis, and 2 of those make us uncomfortable...

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.

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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.