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We often see insiders buying up shares in companies that perform well over the long term. 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 before you buy or sell Jewett-Cameron Trading Company Ltd. (NASDAQ:JCTC.F), you may well want to know whether insiders have been buying or selling.
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 don’t think shareholders should simply follow insider transactions. 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.’
The Last 12 Months Of Insider Transactions At Jewett-Cameron Trading
Over the last year, we can see that the biggest insider sale was by the Director & Corporate Secretary, Michael Nasser, for US$346k worth of shares, at about US$8.04 per share. That means that an insider was selling shares at slightly below the current price (US$8.36). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. 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. It is worth noting that this sale was only 9.5% of Michael Nasser’s holding.
We note that in the last year insiders divested 181k shares for a total of US$1.5m. Insiders in Jewett-Cameron Trading didn’t buy any shares in the last year. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
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Insiders at Jewett-Cameron Trading Have Sold Stock Recently
The last three months saw significant insider selling at Jewett-Cameron Trading. In total, Michael Nasser sold US$126k worth of shares in that time, and we didn’t record any purchases whatsoever. In light of this it’s hard to argue that all the insiders think that the shares are a bargain.
Insider Ownership of Jewett-Cameron Trading
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. From our data, it seems that Jewett-Cameron Trading insiders own 9.7% of the company, worth about US$3.3m. Whilst better than nothing, we’re not overly impressed by these holdings.
What Might The Insider Transactions At Jewett-Cameron Trading Tell Us?
An insider sold stock recently, but they haven’t been buying. Looking to the last twelve months, our data doesn’t show any insider buying. Insiders own relatively few shares in the company, and when you consider the sales, we’re not particularly excited about the stock. As the saying goes, only fools rush in. To put this in context, take a look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .
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 aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.