More Money In The Bank For Clip Money Insiders Who Divested US$1.3m

While Clip Money Inc. (CVE:CLIP) shareholders have had a good week with the stock up 20%, they shouldn't let their guards down. Although prices were relatively low, insiders chose to sell US$1.3m worth of stock in the past 12 months. This could be a sign of impending weakness.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Clip Money

The Last 12 Months Of Insider Transactions At Clip Money

Over the last year, we can see that the biggest insider sale was by the insider, Daren Trousdell, for CA$539k worth of shares, at about CA$0.18 per share. That means that even when the share price was below the current price of CA$0.27, an insider wanted to cash in some shares. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 22% of Daren Trousdell's stake. Daren Trousdell was the only individual insider to sell over the last year.

Over the last year, we can see that insiders have bought 2.60m shares worth CA$464k. On the other hand they divested 6.77m shares, for CA$1.3m. Daren Trousdell ditched 6.77m shares over the year. The average price per share was US$0.19. 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 like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Clip Money Insiders Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at Clip Money. In that period insiders spent CA$423k on shares. However, insider Daren Trousdell netted CA$392k for sales. It is nice to see that insiders have bought, but the quantum isn't large enough to get us excited.

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. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Clip Money insiders own 30% of the company, worth about CA$8.5m. 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 Do The Clip Money Insider Transactions Indicate?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. That said, the purchases were not large. Recent sales exacerbate our caution arising from analysis of Clip Money insider transactions. But we do like the fact that insiders own a fair chunk of the company. 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. For example, Clip Money has 7 warning signs (and 5 which are concerning) we think you should know about.

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.