We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell James E. Wagner Cultivation Corporation (CVE:JWCA), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
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.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.
James E. Wagner Cultivation Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Independent Director Raymond Alarie for CA$200k worth of shares, at about CA$0.21 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$0.11). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
Over the last year, we can see that insiders have bought 1.85m shares worth CA$471k. But insiders sold 565972 shares worth CA$351k. Overall, James E. Wagner Cultivation insiders were net buyers last year. Their average price was about CA$0.25. I'd consider this a positive as it suggests insiders see value at around the current price. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
James E. Wagner Cultivation is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
James E. Wagner Cultivation Insiders Bought Stock Recently
It's good to see that James E. Wagner Cultivation insiders have made notable investments in the company's shares. In total, insiders bought CA$98k worth of shares in that time, and we didn't record any sales whatsoever. That shows some optimism about the company's future.
Does James E. Wagner Cultivation Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 22% of James E. Wagner Cultivation shares, worth about CA$2.7m. 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 James E. Wagner Cultivation Insider Transactions Indicate?
It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest James E. Wagner Cultivation insiders are well aligned, and that they may think the share price is too low. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To help with this, we've discovered 7 warning signs (3 make us uncomfortable!) that you ought to be aware of before buying any shares in James E. Wagner Cultivation.
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.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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