Possible Bearish Signals With Topicus.com Insiders Disposing Stock

In the last year, many Topicus.com Inc. (CVE:TOI) insiders sold a substantial stake in the company which may have sparked shareholders' attention. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Topicus.com

Topicus.com Insider Transactions Over The Last Year

The insider, Robert Alfred Scotchmer, made the biggest insider sale in the last 12 months. That single transaction was for CA$5.4m worth of shares at a price of CA$134 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is CA$119. So it is hard to draw any strong conclusion from it.

Happily, we note that in the last year insiders paid CA$31k for 238.00 shares. But insiders sold 69.28k shares worth CA$9.0m. Over the last year we saw more insider selling of Topicus.com shares, than buying. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like Topicus.com better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insiders At Topicus.com Have Sold Stock Recently

We've seen more insider selling than insider buying at Topicus.com recently. In that time, insiders dumped CA$7.2m worth of shares. On the other hand we note insider Jamal Baksh bought CA$26k worth of shares. Because the selling vastly outweighs the buying, we'd say this is a somewhat bearish sign.

Does Topicus.com Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Topicus.com insiders own 1.6% of the company, currently worth about CA$156m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Topicus.com Insider Transactions Indicate?

The stark truth for Topicus.com is that there has been more insider selling than insider buying in the last three months. Zooming out, the longer term picture doesn't give us much comfort. But since Topicus.com is profitable and growing, we're not too worried by this. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Case in point: We've spotted 1 warning sign for Topicus.com you should be aware of.

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.

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.