How Many Canadian National Railway Company (TSE:CNR) Shares Have Insiders Sold, In The Last Year?

We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Canadian National Railway Company (TSE:CNR).

What Is Insider Buying?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.

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'.

Check out our latest analysis for Canadian National Railway

The Last 12 Months Of Insider Transactions At Canadian National Railway

In the last twelve months, the biggest single sale by an insider was when the Independent Director, Gordon Giffin, sold CA$1.3m worth of shares at a price of CA$132 per share. That means that an insider was selling shares at slightly below the current price (CA$145). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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 19% of Gordon Giffin's holding.

In the last twelve months insiders purchased 12.05k shares for CA$1.5m. But they sold 48.82k shares for CA$6.0m. All up, insiders sold more shares in Canadian National Railway than they bought, over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insiders at Canadian National Railway Have Sold Stock Recently

We've seen more insider selling than insider buying at Canadian National Railway recently. We note Independent Director Edith Holiday cashed in CA$286k worth of shares. On the other hand we note insider Margaret McKenzie bought CA$66k worth of shares. Generally this level of net selling might be considered a bit bearish.

Insider Ownership of Canadian National Railway

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. It's great to see that Canadian National Railway insiders own 0.2% of the company, worth about CA$168m. 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 Does This Data Suggest About Canadian National Railway Insiders?

The insider sales have outweighed the insider buying, at Canadian National Railway, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we found 2 warning signs for Canadian National Railway that deserve your attention before buying any shares.

But note: Canadian National Railway may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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, but not derivative transactions.

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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. 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.
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