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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 we’ll take a look at whether insiders have been buying or selling shares in Imagination Park Technologies Inc. (CNSX:IP).
What Is Insider Selling?
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, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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.’
The Last 12 Months Of Insider Transactions At Imagination Park Technologies
Over the last year, we can see that the biggest insider purchase was by James Skippen for CA$333k worth of shares, at about CA$0.12 per share. That means that an insider was happy to buy shares at above the current price of CA$0.04. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. To us, it’s very important to consider the price insiders pay for shares is very important. 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 5.9m shares worth CA$995k. But they sold 1.7m for CA$324k. In the last twelve months there was more buying than selling by Imagination Park Technologies insiders. They paid about CA$0.17 on average. This is nice to see since it implies that insiders might see value around current prices. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Imagination Park Technologies 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.
Have Imagination Park Technologies Insiders Traded Recently?
Over the last three months, we’ve seen a bit of insider buying at Imagination Park Technologies. Insiders shelled out CA$12k for shares in that time. It’s good to see the insider buying, as well as the lack of recent sellers. However, in this case the amount invested recently is quite small.
For a common shareholder, it is worth checking how many shares are held by company 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. From our data, it seems that Imagination Park Technologies insiders own 5.9% of the company, worth about CA$238k. We do generally prefer see higher levels of insider ownership.
So What Does This Data Suggest About Imagination Park Technologies Insiders?
Insider purchases may have been minimal, in the last three months, but there was no selling at all. The net investment is not enough to encourage us much. But insiders have shown more of an appetite for the stock, over the last year. The transactions are fine but it’d be more encouraging if Imagination Park Technologies insiders bought more shares in the company. I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow for free .
But note: Imagination Park Technologies may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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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.