Insiders Who Sold Vecima Networks Made The Right Call As Market Cap Slides By CA$60m

By selling CA$276k worth of Vecima Networks Inc. (TSE:VCM) stock at an average sell price of CA$17.44 over the last year, insiders seemed to have made the most of their holdings. The company's market worth decreased by CA$60m over the past week after the stock price dropped 11%, although insiders were able to minimize their losses

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Vecima Networks

The Last 12 Months Of Insider Transactions At Vecima Networks

Over the last year, we can see that the biggest insider sale was by the Executive Vice-President, Richard Rockwell, for CA$90k worth of shares, at about CA$18.52 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of CA$20.04. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 11% of Richard Rockwell's stake. Notably Richard Rockwell was also the biggest buyer, having purchased CA$8.7k worth of shares.

In total, Vecima Networks 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!

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Are Vecima Networks Insiders Buying Or Selling?

We have seen a bit of insider selling at Vecima Networks, over the last three months. Founder & Chairman of the Board Surinder Kumar sold just CA$10k worth of shares in that time. Neither the lack of buying nor the presence of selling is heartening. But the volume sold is so low that it really doesn't bother us.

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. Our data indicates that Vecima Networks insiders own about CA$9.8m worth of shares (which is 2.0% of the company). However, it's possible that insiders might have an indirect interest through a more complex structure. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

What Might The Insider Transactions At Vecima Networks Tell Us?

We did not see any insider buying in the last three months, but we did see selling. However, the sales are not big enough to concern us at all. Recent sales exacerbate our caution arising from analysis of Vecima Networks insider transactions. And we're not picking up on high enough insider ownership to give us any comfort. 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. While conducting our analysis, we found that Vecima Networks has 1 warning sign and it would be unwise to ignore it.

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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.