Insider Buying: The Canadian National Railway Company (TSE:CNR) Independent Chairman of the Board Just Bought 1.8% More Shares

Investors who take an interest in Canadian National Railway Company (TSE:CNR) should definitely note that the Independent Chairman of the Board, Robert Pace, recently paid CA$130 per share to buy CA$479k worth of the stock. Although the purchase only increased their holding by 1.8%, it is still a solid purchase in our view.

See our latest analysis for Canadian National Railway

Canadian National Railway Insider Transactions Over The Last Year

The Independent Director, Gordon Giffin, made the biggest insider sale in the last 12 months. That single transaction was for CA$1.3m worth of shares at a price of CA$132 each. That means that even when the share price was slightly below the current price of CA$134, an insider wanted to cash in some shares. 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. 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 19% of Gordon Giffin's stake.

Over the last year, we can see that insiders have bought 16.40k shares worth CA$2.1m. But they sold 48.82k shares for CA$6.0m. Over the last year we saw more insider selling of Canadian National Railway shares, than buying. 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!

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).

Does Canadian National Railway Boast High 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Canadian National Railway insiders own 0.2% of the company, currently worth about CA$155m 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 Canadian National Railway Insider Transactions Indicate?

The recent insider purchases are heartening. But we can't say the same for the transactions over the last 12 months. The recent buying by some insiders , along with high insider ownership, suggest that Canadian National Railway insiders are fairly aligned, and optimistic. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Canadian National Railway has 2 warning signs we think 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, 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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