Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
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 before you buy or sell AutoCanada Inc. (TSE:ACQ), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, such insiders must disclose their trading activities, and not trade on inside information.
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 Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
AutoCanada Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when President & Director Michael Rawluk bought CA$365k worth of shares at a price of CA$12.07 per share. That means that an insider was happy to buy shares at above the current price of CA$10.66. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
Over the last year, we can see that insiders have bought 110k shares worth CA$1.4m. On the other hand they divested 30000 shares, for CA$344k. In the last twelve months there was more buying than selling by AutoCanada insiders. You can see the insider transactions (by 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!
AutoCanada is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
AutoCanada Insiders Are Selling The Stock
Over the last three months, we’ve seen significant insider selling at AutoCanada. In total, Raj Juneja dumped CA$344k worth of shares in that time, and we didn’t record any purchases whatsoever. In light of this it’s hard to argue that all the insiders think that the shares are a bargain.
Insider Ownership of AutoCanada
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data isn’t picking up on much insider ownership at AutoCanada, though insiders do hold about CA$850k worth of shares. We might be missing something but that seems like very low insider ownership.
So What Does This Data Suggest About AutoCanada Insiders?
An insider hasn’t bought AutoCanada stock in the last three months, but there was some selling. On the other hand, the insider transactions over the last year are encouraging. Still, insiders don’t own a great deal of the stock. So we can’t be sure that insiders are optimistic. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course AutoCanada may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.