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 shareholders might well want to know whether insiders have been buying or selling shares in Transat A.T. Inc. (TSE:TRZ).
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, 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 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.’
The Last 12 Months Of Insider Transactions At Transat A.T
Co-Founder & Independent Director Lina De Cesare made the biggest insider sale in the last 12 months. That single transaction was for CA$342k worth of shares at a price of CA$8.55 each. That is hardly a positive sign, even though it took place above the latest price (CA$5.41). So it may not shed much light on insider confidence at current levels.
We note that in the last year insiders divested 87.70k shares for a total of CA$814k. Over the last year we saw more insider selling of Transat A.T shares, than buying. The sellers received a price of around CA$9.29, on average. Insider selling doesn’t make us excited to buy. But the selling was at much higher prices than the current share price (CA$5.41), so it probably doesn’t tell us a lot about the value on offer today. You can see a visual depiction of insider transactions over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
I will like Transat A.T better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Does Transat A.T 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. We usually like to see fairly high levels of insider ownership. Transat A.T insiders own about CA$7.4m worth of shares (which is 3.5% 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 Transat A.T Tell Us?
It doesn’t really mean much that no insider has traded Transat A.T shares in the last quarter. Our analysis of Transat A.T insider transactions leaves us unenthusiastic. And we’re not picking up on high enough insider ownership to give us any comfort. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.