We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in TFI International Inc. (TSE:TFII).
Do Insider Transactions Matter?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
The Last 12 Months Of Insider Transactions At TFI International
The Independent Director Diane Giard made the biggest insider purchase in the last 12 months. That single transaction was for CA$221k worth of shares at a price of CA$44.13 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of CA$116. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
Over the last year, we can see that insiders have bought 7.74k shares worth CA$469k. But they sold 1.00k shares for CA$99k. In the last twelve months there was more buying than selling by TFI International insiders. Their average price was about CA$60.68. We don't deny that it is nice to see insiders buying stock in the company. However, we do note that they were buying at significantly lower prices than today's share price. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
TFI International is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at TFI International Have Bought Stock Recently
It's good to see that TFI International insiders have made notable investments in the company's shares. President Alain Bedard spent CA$158k on stock, and there wasn't any selling. This is a positive in our book as it implies some confidence.
Insider Ownership of TFI International
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's great to see that TFI International insiders own 5.1% of the company, worth about CA$555m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About TFI International Insiders?
It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about TFI International. That's what I like to see! While we like knowing 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. For example - TFI International has 3 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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