It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Seven Generations Energy Ltd. (TSE:VII).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. 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 Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
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Seven Generations Energy Insider Transactions Over The Last Year
Chairman of the Board Mark Monroe made the biggest insider purchase in the last 12 months. That single transaction was for CA$583k worth of shares at a price of CA$9.88 each. That means that even when the share price was higher than CA$8.95 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Happily, we note that in the last year insiders bought 181k shares for a total of CA$1.9m. While Seven Generations Energy insiders bought shares last year, they didn't sell. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insiders at Seven Generations Energy Have Bought Stock Recently
It's good to see that Seven Generations Energy insiders have made notable investments in the company's shares. Not only was there no selling that we can see, but they collectively bought CA$511k worth of shares. This makes one think the business has some good points.
Insider Ownership of Seven Generations Energy
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Insiders own 0.5% of Seven Generations Energy shares, worth about CA$16m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Seven Generations Energy Tell Us?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest Seven Generations Energy insiders are well aligned, and that they may think the share price is too low. Of course, the future is what matters most. So if you are interested in Seven Generations Energy, you should check out this free report on analyst forecasts for the company.
Of course Seven Generations Energy may not be the best stock to buy. So you may wish to see this free collection of high quality 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 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.