Insider Buys Additional US$88k In Sangoma Technologies Stock

Whilst it may not be a huge deal, we thought it was good to see that the Sangoma Technologies Corporation (TSE:STC) Chairman of the Board, Norman Worthington, recently bought CA$88k worth of stock, for CA$7.24 per share. Nevertheless, it only increased their shareholding by a minuscule percentage, and it wasn't a massive purchase by absolute value, either.

Check out our latest analysis for Sangoma Technologies

The Last 12 Months Of Insider Transactions At Sangoma Technologies

In fact, the recent purchase by Chairman of the Board Norman Worthington was not their only trade of Sangoma Technologies shares this year. They previously made a sale of -CA$2.8m worth of shares at a price of CA$3.50 per share. That means that even when the share price was below the current price of CA$6.95, an insider wanted to cash in some shares. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 11% of Norman Worthington's stake.

Happily, we note that in the last year insiders paid CA$989k for 225.10k shares. But insiders sold 804.89k shares worth CA$2.9m. Over the last year we saw more insider selling of Sangoma Technologies shares, than buying. They sold for an average price of about US$3.56. We don't gain confidence from insider selling below the recent share price. Of course, the sales could be motivated for a multitude of reasons, so we shouldn't jump to conclusions. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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Insider Ownership Of Sangoma Technologies

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. It appears that Sangoma Technologies insiders own 23% of the company, worth about CA$54m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Sangoma Technologies Insider Transactions Indicate?

It is good to see the recent insider purchase. But we can't say the same for the transactions over the last 12 months. While recent transactions indicate confidence in Sangoma Technologies, insiders don't own enough of the company to overcome our cautiousness about the longer term transactions. So they seem pretty well aligned, overall. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 1 warning sign with Sangoma Technologies and understanding it should be part of your investment process.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com