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We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Sleep Country Canada Holdings Inc. (TSE:ZZZ), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
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.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
Sleep Country Canada Holdings Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Senior Vice-President of Operations Sieg Will for CA$582k worth of shares, at about CA$21.15 per share. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being CA$19.31). 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. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
In the last twelve months insiders purchased 34638 shares for CA$723k. On the other hand they divested 47291 shares, for CA$1.0m. All up, insiders sold more shares in Sleep Country Canada Holdings than they bought, over the last year. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
Sleep Country Canada Holdings Insiders Bought Stock Recently
Over the last three months, we’ve seen a bit of insider buying at Sleep Country Canada Holdings. Insiders shelled out CA$46k for shares in that time. We like it when there are only buyers, and no sellers. However, in this case the amount invested recently is quite small.
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. We usually like to see fairly high levels of insider ownership. Sleep Country Canada Holdings insiders own about CA$22m worth of shares. That equates to 3.1% of the company. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About Sleep Country Canada Holdings Insiders?
We note a that there has been a bit of insider buying recently (but no selling). Overall the buying isn’t worth writing home about. Our analysis of Sleep Country Canada Holdings insider transactions leaves us cautious. But we do like the fact that insiders own a fair chunk of the company. 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, 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.
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If you spot an error that warrants correction, please contact the editor at email@example.com. 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.