Stock Analysis

This Insider Has Just Sold Shares In Tecsys Inc. (TSE:TCS)

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We wouldn't blame Tecsys Inc. (TSE:TCS) shareholders if they were a little worried about the fact that David Brereton, the Executive Chairman recently netted about CA$2.3m selling shares at an average price of CA$27.07. However, that sale only accounted for 3.7% of their holding, so arguably it doesn't say much about their conviction.

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The Last 12 Months Of Insider Transactions At Tecsys

Notably, that recent sale by Executive Chairman David Brereton was not the only time they sold Tecsys shares this year. They previously made an even bigger sale of -CA$4.4m worth of shares at a price of CA$29.15 per share. So what is clear is that an insider saw fit to sell at around the current price of CA$27.08. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

Over the last year, we can see that insiders have bought 2.42k shares worth CA$79k. But they sold 233.26k shares for CA$6.6m. David Brereton sold a total of 233.26k shares over the year at an average price of CA$28.41. You can see the insider transactions (by companies and 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!

TSX:TCS Insider Trading Volume March 19th 2023

I will like Tecsys better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership Of Tecsys

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Tecsys insiders own about CA$72m worth of shares. That equates to 18% of the company. 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 Does This Data Suggest About Tecsys Insiders?

An insider hasn't bought Tecsys stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn't bring confidence, either. On the plus side, Tecsys makes money, and is growing profits. Insiders own shares, but we're still pretty cautious, given the history of sales. We're in no rush to buy! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Tecsys. In terms of investment risks, we've identified 1 warning sign with Tecsys and understanding it should be part of your investment process.

Of course Tecsys may not be the best stock to buy. So you may wish to see this free collection of high quality 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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