We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Intouch Insight Ltd. (CVE:INX), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
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The Last 12 Months Of Insider Transactions At Intouch Insight
Independent Director Eric Beutel made the biggest insider purchase in the last 12 months. That single transaction was for CA$126k worth of shares at a price of CA$0.33 each. So it’s clear an insider wanted to buy, at around the current price, which is CA$0.34. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it’s less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. Happily, the Intouch Insight insiders decided to buy shares at close to current prices.
Happily, we note that in the last year insiders bought 1.1m shares for a total of CA$451k. While Intouch Insight insiders bought shares last year, they didn’t sell. Their average price was about CA$0.41. These transactions suggest that insiders have considered the current price attractive. The chart below shows insider transactions (by 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 always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insiders at Intouch Insight Have Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at Intouch Insight. Overall, two insiders shelled out CA$150k for shares in the company — and none sold. This could be interpreted as suggesting a positive outlook.
Insider Ownership of Intouch Insight
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Intouch Insight insiders own about CA$2.6m worth of shares. That equates to 35% 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.
What Might The Insider Transactions At Intouch Insight Tell Us?
It’s certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn’t make a profit over the last twelve months, which makes us cautious. Given that insiders also own a fair bit of Intouch Insight we think they are probably pretty confident of a bright future. Along with insider transactions, I recommend checking if Intouch Insight is growing revenue. This free chart of historic revenue and earnings should make that easy.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.