We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 Indigo Books & Music Inc (TSE:IDG), 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, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
The Last 12 Months Of Insider Transactions At Indigo Books & Music
Non-Independent Director Gerald Schwartz made the biggest insider purchase in the last 12 months. That single transaction was for CA$392k worth of shares at a price of CA$19.02 each. So it’s clear an insider wanted to buy, even at a higher price. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. It’s not at all bad to see insiders buy shares at or above current prices.
In the last twelve months insiders paid CA$2.3m for 121.60k shares purchased. In the last twelve months there was more buying than selling by Indigo Books & Music insiders. They paid about CA$19.18 on average. These transactions suggest that insiders have considered the current price of CA$12.68 attractive. You can see a visual depiction of insider transactions over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership of Indigo Books & Music
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Insiders own 29% of Indigo Books & Music shares, worth about CA$74m. While this is strong but not in the top group, when it comes to insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About Indigo Books & Music Insiders?
It doesn’t really mean much that no insider has traded Indigo Books & Music shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Indigo Books & Music and their transactions don’t cause us concern. 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 Indigo Books & Music may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.