Insider Buys Additional CA$675k In TransAlta Stock

Investors who take an interest in TransAlta Corporation (TSE:TA) should definitely note that the Executive VP of Finance & CFO, Joel Hunter, recently paid CA$14.99 per share to buy CA$675k worth of the stock. However, it only increased shareholding by a small percentage, and it wasn't a huge purchase by absolute value, either.

See our latest analysis for TransAlta

TransAlta Insider Transactions Over The Last Year

Notably, that recent purchase by Joel Hunter is the biggest insider purchase of TransAlta shares that we've seen in the last year. That means that an insider was happy to buy shares at above the current price of CA$14.98. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

Happily, we note that in the last year insiders paid CA$717k for 49.71k shares. But they sold 206.88k shares for CA$2.5m. All up, insiders sold more shares in TransAlta 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 want to know exactly who sold, for how much, and when, simply click on the graph below!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Does TransAlta 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. TransAlta insiders own about CA$20m worth of shares. That equates to 0.4% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The TransAlta Insider Transactions Indicate?

The recent insider purchase is heartening. On the other hand the transaction history, over the last year, isn't so positive. We don't take much heart from transactions by TransAlta insiders over the last year. But they own a reasonable amount of the company, and there was some buying recently. So they seem pretty well aligned, overall. 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. For example, TransAlta has 3 warning signs (and 2 which are significant) we think you should know about.

But note: TransAlta 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 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.