TransAlta Insiders Sold CA$2.6m Of Shares Suggesting Hesitancy

In the last year, many TransAlta Corporation (TSE:TA) insiders sold a substantial stake in the company which may have sparked shareholders' attention. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At TransAlta

Over the last year, we can see that the biggest insider sale was by the insider, Kerry O'Reilly, for CA$874k worth of shares, at about CA$20.01 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is CA$15.60. So it may not tell us anything about how insiders feel about the current share price.

In total, TransAlta insiders sold more 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. By clicking on the graph below, you can see the precise details of each insider transaction!

View our latest analysis for TransAlta

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Are TransAlta Insiders Buying Or Selling?

In the last quarter Executive Vice President of Commercial & Customer Relations Blain van Melle sold CA$70.8 worth of equity. That's not a lot. The net selling is so small that it's hard to draw any conclusions from these recent transactions.

Insider Ownership Of TransAlta

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that TransAlta insiders own 0.5% of the company, worth about CA$21m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At TransAlta Tell Us?

We did not see any insider buying in the last three months, but we did see selling. But the sales were small, so we're not concerned. We're a little cautious about the insider selling at TransAlta. The modest level of insider ownership is, at least, some 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. Be aware that TransAlta is showing 2 warning signs in our investment analysis, and 1 of those is a bit unpleasant...

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.