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 Sangoma Technologies Corporation (CVE:STC), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, rules govern insider transactions, and certain disclosures are required.
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.
Sangoma Technologies Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the insider, Anthony Lewis, sold CA$1.1m worth of shares at a price of CA$1.77 per share. That means that an insider was selling shares at slightly below the current price (CA$2.15). 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. It is worth noting that this sale was 51% of Anthony Lewis's holding.
Happily, we note that in the last year insiders paid CA$215k for 615233 shares. But they sold 1042135 for CA$1.6m. All up, insiders sold more shares in Sangoma Technologies than they bought, over the last year. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Does Sangoma Technologies Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It appears that Sangoma Technologies insiders own 12% of the company, worth about CA$19m. 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 Sangoma Technologies Insiders?
It doesn't really mean much that no insider has traded Sangoma Technologies shares in the last quarter. Our analysis of Sangoma Technologies insider transactions leaves us cautious. But it's good to see that insiders own shares in the company. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Sangoma Technologies.
Of course Sangoma Technologies may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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 firstname.lastname@example.org. 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.