As Tricon Residential Inc. (TSE:TCN) drops to CA$3.7b market cap, insiders might rethink their US$3.7m stock purchase earlier this year
The recent price decline of 11% in Tricon Residential Inc.'s (TSE:TCN) stock may have disappointed insiders who bought US$3.7m worth of shares at an average price of US$17.03 in the past 12 months. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth US$2.9m which is not ideal.
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.
See our latest analysis for Tricon Residential
The Last 12 Months Of Insider Transactions At Tricon Residential
The President Gary Berman made the biggest insider purchase in the last 12 months. That single transaction was for CA$993k worth of shares at a price of CA$16.29 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$13.66). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
In the last twelve months insiders purchased 215.73k shares for CA$3.7m. But they sold 14.76k shares for CA$230k. In total, Tricon Residential insiders bought more than they sold over the last year. You can see a visual depiction of insider transactions (by companies and individuals) 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!
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 Tricon Residential Have Sold Stock Recently
Over the last three months, we've seen notably more insider selling, than insider buying, at Tricon Residential. In total, Independent Director J. Knowlton sold CA$230k worth of shares in that time. On the other hand we note President Gary Berman bought CA$3.3k worth of shares. The share price has moved a bit recently, but it's hard to argue that the selling is a positive.
Insider Ownership of Tricon Residential
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. Tricon Residential insiders own about CA$101m worth of shares. That equates to 2.7% of the company. 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 Tricon Residential Insider Transactions Indicate?
Unfortunately, there has been more insider selling of Tricon Residential stock, than buying, in the last three months. But we take heart from prior transactions. On top of that, insiders own a significant portion of the company. So we're happy to look past recent trading. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 7 warning signs for Tricon Residential (of which 2 can't be ignored!) you should know about.
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, but not derivative transactions.
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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.
