This Insider Has Just Sold Shares In Computer Modelling Group

Anyone interested in Computer Modelling Group Ltd. (TSE:CMG) should probably be aware that the Vice President of Science & Innovation and Chief Scientist, Long Nghiem, recently divested CA$322k worth of shares in the company, at an average price of CA$12.76 each. On the bright side, that sale was only 3.9% of their holding, so we doubt it's very meaningful, on its own.

Check out our latest analysis for Computer Modelling Group

The Last 12 Months Of Insider Transactions At Computer Modelling Group

Over the last year, we can see that the biggest insider sale was by the insider, Anjani Kumar, for CA$1.2m worth of shares, at about CA$9.92 per share. That means that an insider was selling shares at slightly below the current price (CA$12.74). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was 74% of Anjani Kumar's holding.

Happily, we note that in the last year insiders paid CA$510k for 48.25k shares. But they sold 1.45m shares for CA$16m. All up, insiders sold more shares in Computer Modelling Group than they bought, over the last year. The sellers received a price of around CA$10.83, on average. It's not too encouraging to see that insiders have sold at below the current price. Of course, the sales could be motivated for a multitude of reasons, so we shouldn't jump to conclusions. 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!

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Insider Ownership

Many investors like to check how much of a company is owned by 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. Computer Modelling Group insiders own about CA$23m worth of shares. That equates to 2.2% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Computer Modelling Group Insiders?

The stark truth for Computer Modelling Group is that there has been more insider selling than insider buying in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. But it is good to see that Computer Modelling Group is growing earnings. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. While conducting our analysis, we found that Computer Modelling Group has 2 warning signs and it would be unwise to ignore these.

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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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.