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Should You Be Worried About Insider Transactions At Ag Growth International Inc. (TSE:AFN)?

Simply Wall St

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 Ag Growth International Inc. (TSE:AFN).

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.

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. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'

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Check out our latest analysis for Ag Growth International

The Last 12 Months Of Insider Transactions At Ag Growth International

The Special Advisor & Director, Gary Anderson, made the biggest insider sale in the last 12 months. That single transaction was for CA$675k worth of shares at a price of CA$63.72 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of CA$52.47. So it is hard to draw any strong conclusion from it. The only individual insider seller over the last year was Gary Anderson. Notably Gary Anderson was also the biggest buyer, having purchased CA$300k worth of shares.

Gary Anderson sold a total of 27100 shares over the year at an average price of CA$60.25. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

TSX:AFN Recent Insider Trading, May 18th 2019

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Ag Growth International insiders own 3.1% of the company, worth about CA$30m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Ag Growth International Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. Still, the insider transactions at Ag Growth International in the last 12 months are not very heartening. The modest level of insider ownership is, at least, some comfort. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Ag Growth International.

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 editorial-team@simplywallst.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.