It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Cogeco Communications Inc. (TSE:CCA), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
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 equally, we would consider it foolish to ignore insider transactions altogether. 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 Cogeco Communications
The CFO & Senior VP, Patrice Ouimet, made the biggest insider sale in the last 12 months. That single transaction was for CA$310k worth of shares at a price of CA$103 each. So it's clear an insider wanted to take some cash off the table, even below the current price of CA$114. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was 92% of Patrice Ouimet's stake.
Over the last year, we note insiders sold 6823 shares worth CA$694k. Cogeco Communications insiders didn't buy any shares over the last year. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders at Cogeco Communications Have Sold Stock Recently
Over the last three months, we've seen a bit of insider selling at Cogeco Communications. Senior VP and Chief Technology & Strategy Officer Luc Noiseux only netted CA$28k selling shares, in that period. Neither the lack of buying nor the presence of selling is heartening. But the selling simply isn't sufficiently substantial to be of much use as a signal.
Insider Ownership of Cogeco Communications
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Cogeco Communications insiders own about CA$13m worth of shares. That equates to 0.2% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Cogeco Communications Insiders?
While there has not been any insider buying in the last three months, there has been selling. But the sales were small, so we're not concerned. We're a little cautious about the insider selling at Cogeco Communications. But it's good to see that insiders own shares in the company. Of course, the future is what matters most. So if you are interested in Cogeco Communications, you should check out this free report on analyst forecasts for the company.
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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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.