Positive Signs As Multiple Insiders Buy Shawcor Stock
Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Shawcor Ltd. (TSE:MATR), that sends out a positive message to the company's shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for Shawcor
Shawcor Insider Transactions Over The Last Year
The insider, Simon Dewey, made the biggest insider sale in the last 12 months. That single transaction was for CA$135k worth of shares at a price of CA$13.54 each. So it's clear an insider wanted to take some cash off the table, even below the current price of CA$15.24. 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. We note that the biggest single sale was 51% of Simon Dewey's holding.
Happily, we note that in the last year insiders paid CA$315k for 20.27k shares. But insiders sold 15.96k shares worth CA$235k. In total, Shawcor insiders bought more than they sold over the last year. They paid about CA$15.54 on average. This is nice to see since it implies that insiders might see value around current prices. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Shawcor 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.
Shawcor Insiders Bought Stock Recently
There has been significantly more insider buying, than selling, at Shawcor, over the last three months. In fact, three insiders bought CA$156k worth of shares. But we did see insider Simon Dewey sell shares worth CA$86k. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.
Does Shawcor Boast High 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data suggests Shawcor insiders own 0.5% of the company, worth about CA$5.1m. We consider this fairly low insider ownership.
So What Do The Shawcor Insider Transactions Indicate?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Shawcor insiders are reasonably well aligned, and optimistic for the future. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Shawcor.
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. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
