Insiders of Clip Money Getting Good Value On Their US$923.7k Investment

Last week, Clip Money Inc. (CVE:CLIP) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 13% last week, resulting in a CA$2.6m increase in the company's market worth, implying a 18% gain on their initial purchase. In other words, the original US$923.7k purchase is now worth US$1.09m.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Clip Money

Clip Money Insider Transactions Over The Last Year

The insider, Daren Trousdell, made the biggest insider sale in the last 12 months. That single transaction was for CA$539k worth of shares at a price of CA$0.18 each. So it's clear an insider wanted to take some cash off the table, even below the current price of CA$0.23. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 22% of Daren Trousdell's holding. Daren Trousdell was the only individual insider to sell over the last year.

In the last twelve months insiders purchased 4.85m shares for CA$924k. But they sold 2.98m shares for CA$539k. In total, Clip Money insiders bought more than they sold over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insiders At Clip Money Have Bought Stock Recently

It's good to see that Clip Money insiders have made notable investments in the company's shares. Not only was there no selling that we can see, but they collectively bought CA$488k worth of shares. This could be interpreted as suggesting a positive outlook.

Insider Ownership Of Clip Money

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Clip Money insiders own about CA$8.4m worth of shares. That equates to 33% 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 Do The Clip Money Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. Insiders likely see value in Clip Money shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Clip Money. To help with this, we've discovered 5 warning signs (2 shouldn't be ignored!) that you ought to be aware of before buying any shares in Clip Money.

But note: Clip Money 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.

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.