Insiders of Sleep Country Canada Holdings Inc. (TSE:ZZZ) would have made a tidy sum after selling CA$2.0m worth of stock at a high price

By
Simply Wall St
Published
March 21, 2022
TSX:ZZZ
Source: Shutterstock

Last week, Sleep Country Canada Holdings Inc.'s (TSE:ZZZ) stock jumped 11%, but insiders who sold CA$2.0m worth of stock in over the past year are likely to be in a better position. Selling at an average price of CA$35.99, which is higher than the current price, may have been the best move for these insiders because their investment would have been worth less now than when they sold.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Sleep Country Canada Holdings

The Last 12 Months Of Insider Transactions At Sleep Country Canada Holdings

Over the last year, we can see that the biggest insider sale was by the insider, Eric Solomon, for CA$1.2m worth of shares, at about CA$39.77 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (CA$30.58). So it is hard to draw any strong conclusion from it.

Happily, we note that in the last year insiders paid CA$463k for 15.71k shares. But insiders sold 56.77k shares worth CA$2.0m. All up, insiders sold more shares in Sleep Country Canada Holdings than they bought, over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
TSX:ZZZ Insider Trading Volume March 21st 2022

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 2.8% of Sleep Country Canada Holdings shares, worth about CA$32m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Sleep Country Canada Holdings Insider Transactions Indicate?

The fact that there have been no Sleep Country Canada Holdings insider transactions recently certainly doesn't bother us. Our analysis of Sleep Country Canada Holdings insider transactions leaves us cautious. The modest level of insider ownership is, at least, some comfort. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we found 2 warning signs for Sleep Country Canada Holdings that deserve your attention before buying any shares.

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, but not derivative transactions.

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