It is commonly known that insider buying, management purchasing stock in the own firm, is an optimistic signal. Insiders have valuable insights into the company’s current operations and opportunities, so they are best placed to benefit from a timely, and legal, trade. Though it is certainly not enough to base your investment decision merely on these signals alone, below I’ve put together three stocks you should examine further.
Bombardier Inc. (TSX:BBD.B)
Bombardier Inc., together with its subsidiaries, manufactures and sells transportation equipment worldwide. Started in 1942, and now led by CEO Alain Bellemare, the company now has 57,050 employees and with the market cap of CAD CA$10.05B, it falls under the large-cap stocks category.
Bombardier Inc’s (TSX:BBD.B) insiders have invested 100,000 shares in the large-cap stocks within the past three months. In total, individual insiders own over 272 million shares in the business, which makes up around 11.51% of total shares outstanding.
The insider that recently bought more shares is Douglas Oberhelman .
With revenues predicted to grow at 13.68% each year for the next couple of years, driving an impressive earnings growth of 44.13%, insiders may be buying based on BBD.B’s optimistic outlook which they believe are not yet priced into the stock. Interested in Bombardier? Find out more here.
Dundee Precious Metals Inc. (TSX:DPM)
Dundee Precious Metals Inc., a gold mining company, engages in the acquisition, exploration, development, mining, and processing of precious metals. Established in 1983, and currently headed by CEO Richard Howes, the company provides employment to 3,540 people and with the company’s market cap sitting at CAD CA$612.23M, it falls under the small-cap category.
Dundee Precious Metals Inc’s (TSX:DPM) insiders have invested more than 1 million shares in the small-cap stocks within the past three months. In total, individual insiders own less than one million shares in the business, or around 0.36% of total shares outstanding.
The entity that bought on the open market in the last three months was
GMT Capital Corp.. Although this is an institutional investor, rather than a company executive or board member, the insights gained from direct access to management as a large investor would make it more well-informed than the average retail investor. In this specific instance, I would classify this investor as a company insider.
Analysts anticipate a relatively flat top-line growth next year, however, earnings are predicted to grow at an impressive rate of 63.61% which could indicate the company’s cost controls will show meaningful results, offsetting the slow revenue growth. Insiders may have confidence in these cost initiatives, or believe the market has overly penalized the company’s shares, leading to an opportune time to buy. More detail on Dundee Precious Metals here.
TSO3 Inc. (TSX:TOS)
TSO3 Inc. engages in the research, development, production, maintenance, sale, and licensing of sterilization processes, related consumable supplies, and accessories for heat and moisture sensitive medical devices worldwide. Started in 1998, and currently headed by CEO Richard Rumble, the company employs 80 people and has a market cap of CAD CA$78.03M, putting it in the small-cap group.
TSO3 Inc (TSX:TOS) is one of Canada’s small-cap stocks that saw some insider buying over the past three months, with insiders investing in 161,900 shares during this period. In total, individual insiders own less than one million shares in the business, or around 0.69% of total shares outstanding.
Insiders that have recently ramped up their holdings are: Glen Kayll (management and board member) . , Harold Tessman (management) . and Richard Rumble (management) .
Industry analysts are forecasting negative revenue growth in the upcoming year, which could signal some headwinds for TOS moving forward. Conversely, its bottom-line growth is expected to be an outstanding 36.91% which could signal management’s cost initiatives yielding positive results. Insiders’ conviction of this strategy could be an underlying drive for the recent ramp up in shareholdings. Dig deeper into TSO3 here.
For more stocks with high, positive trading volume by insiders, explore this interactive list of stocks with recent insider buying.
To help readers see pass 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.