Shareholders may not want to ignore the CA$1.0m worth sales made by NamSys Inc. (CVE:CTZ) insiders this past year

By
Simply Wall St
Published
November 22, 2021
TSXV:CTZ
Source: Shutterstock

Despite a 11% gain in NamSys Inc.'s (CVE:CTZ) stock price this week, shareholders shouldn't let up. Although prices were relatively low, insiders chose to sell CA$1.0m 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, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for NamSys

NamSys Insider Transactions Over The Last Year

The CEO & Director, Kenneth Sparks, made the biggest insider sale in the last 12 months. That single transaction was for CA$987k worth of shares at a price of CA$0.85 each. That means that an insider was selling shares at slightly below the current price (CA$0.91). 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. 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 11% of Kenneth Sparks's holding.

Happily, we note that in the last year insiders paid CA$750k for 882.87k shares. But they sold 1.18m shares for CA$1.0m. In total, NamSys insiders sold more than they bought over the last year. 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!

insider-trading-volume
TSXV:CTZ Insider Trading Volume November 23rd 2021

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does NamSys Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 37% of NamSys shares, worth about CA$8.6m. 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 NamSys Insiders?

It doesn't really mean much that no insider has traded NamSys shares in the last quarter. Still, the insider transactions at NamSys in the last 12 months are not very heartening. But it's good to see that insiders own shares in the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To help with this, we've discovered 3 warning signs (1 can't be ignored!) that you ought to be aware of before buying any shares in NamSys.

Of course NamSys 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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