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Over the last year, a good number of insiders have significantly increased their holdings in Canadian Pacific Railway Limited (TSE:CP). This is encouraging because it indicates that insiders are more optimistic about the company's prospects.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
Canadian Pacific Railway Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Executive Vice President of Operations Mark Redd bought CA$1.1m worth of shares at a price of CA$71.77 per share. Even though the purchase was made at a significantly lower price than the recent price (CA$89.66), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
Over the last year, we can see that insiders have bought 16.19k shares worth CA$1.2m. On the other hand they divested 2.12k shares, for CA$191k. In the last twelve months there was more buying than selling by Canadian Pacific Railway insiders. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
Canadian Pacific Railway is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Canadian Pacific Railway
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Canadian Pacific Railway insiders own about CA$15m worth of shares. That equates to 0.02% 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.
What Might The Insider Transactions At Canadian Pacific Railway Tell Us?
It doesn't really mean much that no insider has traded Canadian Pacific Railway shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Canadian Pacific Railway and we see no evidence to suggest they are worried about the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To that end, you should learn about the 2 warning signs we've spotted with Canadian Pacific Railway (including 1 which makes us a bit uncomfortable).
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.