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It is not uncommon to see companies perform well in the years after insiders buy shares. 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 GP Strategies Corporation (NYSE:GPX).
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
The Last 12 Months Of Insider Transactions At GP Strategies
Independent Director Marshall Geller made the biggest insider purchase in the last 12 months. That single transaction was for US$78k worth of shares at a price of US$19.62 each. So it’s clear an insider wanted to buy, even at a higher price. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. That purchase may suggest an expectation of positive returns over the long term.
Over the last year, we can see that insiders have bought 12.00k shares worth US$221k. Overall, GP Strategies insiders were net buyers last year. They paid about US$18.38 on average. This is nice to see since it implies that insiders might see value around current prices (around US$15.21). You can see a visual depiction of insider transactions (by 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!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
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. From our data, it seems that GP Strategies insiders own 3.9% of the company, worth about US$9.8m. Whilst better than nothing, we’re not overly impressed by these holdings.
So What Do The GP Strategies Insider Transactions Indicate?
The fact that there have been no GP Strategies insider transactions recently certainly doesn’t bother us. But insiders have shown more of an appetite for the stock, over the last year. The transactions are fine but it’d be more encouraging if GP Strategies insiders bought more shares in the company. Of course, the future is what matters most. So if you are interested in GP Strategies, you should check out this free report on analyst forecasts for the company.
But note: GP Strategies 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.