How Much Are Linamar Corporation (TSE:LNR) Insiders Spending On Buying Shares?
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
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 Linamar Corporation (TSE:LNR).
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 on the market. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. 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'.
Check out our latest analysis for Linamar
The Last 12 Months Of Insider Transactions At Linamar
In the last twelve months, the biggest single purchase by an insider was when CEO & Non-Independent Director Linda Hasenfratz bought CA$2.3m worth of shares at a price of CA$45.36 per share. That means that an insider was happy to buy shares at around the current price of CA$48.88. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for Linamar share holders is that insiders were buying at near the current price.
Over the last year, we can see that insiders have bought 73349 shares worth CA$3.5m. But insiders sold 51460 shares worth CA$2.6m. In the last twelve months there was more buying than selling by Linamar 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!
Linamar is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders at Linamar Have Sold Stock Recently
The last quarter saw substantial insider selling of Linamar shares. In total, CTO, Executive VP of Sales & Marketing and Non-Independent Director Mark Stoddart sold CA$216k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.
Does Linamar Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Linamar insiders own 31% of the company, currently worth about CA$991m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Linamar Tell Us?
An insider hasn't bought Linamar stock in the last three months, but there was some selling. In contrast, they appear keener if you look at the last twelve months. And insider ownership remains quite considerable. So we're not too bothered by recent selling. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Linamar.
But note: Linamar 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 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.
