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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 Canacol Energy Ltd (TSE:CNE).
What Is Insider Buying?
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 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.’
Canacol Energy Insider Transactions Over The Last Year
Independent Director Gregory Elliott made the biggest insider purchase in the last 12 months. That single transaction was for CA$216k worth of shares at a price of CA$4.35 each. So it’s clear an insider wanted to buy, even at a higher price. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. That purchase may suggest an expectation of positive returns over the long term.
In the last twelve months insiders paid CA$541k for 129.60k shares purchased. In total, Canacol Energy insiders bought more than they sold over the last year. Their average price was about CA$4.18. These transactions show that insiders have confidence to invest their own money in the stock, albeit at slightly below the recent price of CA$4.27. 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!
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.
Insiders at Canacol Energy Have Bought Stock Recently
Over the last three months, we’ve seen a bit of insider buying at Canacol Energy. Vice President of Capital Markets & Investor Relations Kevin Flick purchased US$20k worth of shares in that period. It’s good to see the insider buying, as well as the lack of recent sellers. However, in this case the amount invested recently is quite small.
Insider Ownership of Canacol Energy
Many investors like to check how much of a company is owned by 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. Insiders own 2.4% of Canacol Energy shares, worth about CA$18m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Canacol Energy Insider Transactions Indicate?
Insider purchases have outweighed sales, in the last three months. But overall the difference isn’t worth writing home about. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Canacol Energy and their transactions don’t cause us concern. 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.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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 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.