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Have Insiders Been Selling Spruce Ridge Resources Ltd. (CVE:SHL) Shares?

Simply Wall St

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Spruce Ridge Resources Ltd. (CVE:SHL), 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, rules govern insider transactions, and certain disclosures are required.

Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. 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.

See our latest analysis for Spruce Ridge Resources

Spruce Ridge Resources Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the CEO, President & Director, John Ryan, for CA$110k worth of shares, at about CA$0.06 per share. While insider selling is a negative, to us, it is more negative if the shares are sold 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$0.05. So it may not shed much light on insider confidence at current levels. John Ryan was the only individual insider to sell shares in the last twelve months. Notably John Ryan was also the biggest buyer, having purchased CA$10.0k worth of shares.

John Ryan divested 2528000 shares over the last 12 months at an average price of CA$0.056. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

TSXV:SHL Recent Insider Trading, October 23rd 2019

I will like Spruce Ridge Resources better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership

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. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data indicates that Spruce Ridge Resources insiders own about CA$540k worth of shares (which is 11% of the company). Whilst better than nothing, we're not overly impressed by these holdings.

So What Do The Spruce Ridge Resources Insider Transactions Indicate?

The fact that there have been no Spruce Ridge Resources insider transactions recently certainly doesn't bother us. Our analysis of Spruce Ridge Resources insider transactions leaves us unenthusiastic. And we're not picking up on high enough insider ownership to give us any comfort. Along with insider transactions, I recommend checking if Spruce Ridge Resources is growing revenue. This free chart of historic revenue and earnings should make that easy.

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.

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 editorial-team@simplywallst.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.