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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 we'll take a look at whether insiders have been buying or selling shares in TransAlta Renewables Inc. (TSE:RNW).
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.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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'.
TransAlta Renewables Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Chairman of the Board, Allen Hagerman, for CA$205k worth of shares, at about CA$13.69 per share. That means that an insider was selling shares at below the current price (CA$13.75). 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. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 50% of Allen Hagerman's holding.
We note that in the last year insiders divested 27000 shares for a total of CA$371k. Insiders in TransAlta Renewables didn't buy any shares in the last year. The chart below shows insider transactions (by individuals) over the last year. 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.
Insiders at TransAlta Renewables Have Sold Stock Recently
The last quarter saw substantial insider selling of TransAlta Renewables shares. Specifically, insiders ditched CA$371k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
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. Our data isn't picking up on much insider ownership at TransAlta Renewables, though insiders do hold about CA$789k worth of shares. We might be missing something but that seems like very low insider ownership.
What Might The Insider Transactions At TransAlta Renewables Tell Us?
Insiders haven't bought TransAlta Renewables stock in the last three months, but there was some selling. And even if we look to the last year, we didn't see any purchases. On the plus side, TransAlta Renewables makes money, and is growing profits. When you consider that most companies have higher levels of insider ownership, we're a little wary. We'd certainly think twice before buying! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for TransAlta Renewables.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.
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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.