For Thinkific Labs Insiders, Selling US$833k Of Shares Was A Smart Move

Even though Thinkific Labs Inc. (TSE:THNC) stock gained 12% last week, insiders who sold US$833k worth of stock over the past year are probably better off. Selling at an average price of US$2.82, 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.

View our latest analysis for Thinkific Labs

Thinkific Labs Insider Transactions Over The Last Year

In fact, the recent sale by Stephen Krenzer was the biggest sale of Thinkific Labs shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to take some cash off the table, even below the current price of CA$4.12. 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. This single sale was 53% of Stephen Krenzer's stake.

In the last year Thinkific Labs insiders didn't buy any company stock. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insiders At Thinkific Labs Have Sold Stock Recently

The last three months saw significant insider selling at Thinkific Labs. In total, insiders sold CA$424k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership

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. It's great to see that Thinkific Labs insiders own 45% of the company, worth about CA$145m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Thinkific Labs Insiders?

Insiders haven't bought Thinkific Labs stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Thinkific Labs. In terms of investment risks, we've identified 2 warning signs with Thinkific Labs and understanding them should be part of your investment process.

Of course Thinkific Labs 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 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.