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We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in George Weston Limited (TSE:WN).
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, 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. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
George Weston Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Executive VP & Chief Talent Officer, Rashid Wasti, for CA$488k worth of shares, at about CA$102 per share. So what is clear is that an insider saw fit to sell at around the current price of CA$101. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.
Happily, we note that in the last year insiders paid CA$1.6m for 16100 shares. But they sold 6750 for CA$682k. In the last twelve months there was more buying than selling by George Weston insiders. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
George Weston Insiders Are Selling The Stock
We've seen more insider selling than insider buying at George Weston recently. We note insiders cashed in CA$591k worth of shares. On the other hand we note Executive VP & Chief Talent Officer Rashid Wasti bought CA$483k worth of shares. Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the shares are not cheap.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. George Weston insiders own about CA$471m worth of shares (which is 3.0% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At George Weston Tell Us?
The insider sales have outweighed the insider buying, at George Weston, in the last three months. On the other hand, the insider transactions over the last year are encouraging. And insider ownership remains quite considerable. So the recent selling doesn't worry us. Of course, the future is what matters most. So if you are interested in George Weston, you should check out this free report on analyst forecasts for the company.
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.