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 AutoCanada Inc. (TSE:ACQ), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
AutoCanada Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the insider, Raj Juneja, sold CA$344k worth of shares at a price of CA$11.45 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of CA$8.19. So it may not shed much light on insider confidence at current levels. Raj Juneja was the only individual insider to sell over the last year. Notably Raj Juneja was also the biggest buyer, having purchased CA$554k worth of shares.
Over the last year, we can see that insiders have bought 49222 shares worth CA$554k. But they sold 30000 for CA$344k. In total, AutoCanada insiders bought more than they sold over the last year. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
AutoCanada is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at AutoCanada Have Bought Stock Recently
Over the last quarter, AutoCanada insiders have spent a meaningful amount on shares. We can see that Independent Director Dennis DesRosiers paid CA$97k for shares in the company. No-one sold. This makes one think the business has some good points.
Does AutoCanada 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data isn't picking up on much insider ownership at AutoCanada, though insiders do hold about CA$735k worth of shares. This level of insider ownership is notably low, and not very encouraging.
What Might The Insider Transactions At AutoCanada Tell Us?
It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that AutoCanada insiders are reasonably well aligned, and optimistic for the future. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for AutoCanada.
But note: AutoCanada 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, but not derivative transactions.
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.