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Have Insiders Been Buying Home Capital Group Inc. (TSE:HCG) Shares?

We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we'll take a look at whether insiders have been buying or selling shares in Home Capital Group Inc. (TSE:HCG).

What Is Insider Selling?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.

We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

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Check out our latest analysis for Home Capital Group

Home Capital Group Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider Sheng Chung for CA$2.6m worth of shares, at about CA$18.10 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of CA$24.70. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Happily, we note that in the last year insiders bought 344k shares for a total of CA$5.9m. While Home Capital Group insiders bought shares last year, they didn't sell. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

TSX:HCG Recent Insider Trading, August 9th 2019
TSX:HCG Recent Insider Trading, August 9th 2019

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 Home Capital Group Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at Home Capital Group. Sheng Chung spent CA$2.1m on stock, and there wasn't any selling. That shows some optimism about the company's future.

Does Home Capital Group Boast High Insider Ownership?

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. It appears that Home Capital Group insiders own 8.1% of the company, worth about CA$119m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Home Capital Group Insiders?

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Home Capital Group. Looks promising! Of course, the future is what matters most. So if you are interested in Home Capital Group, you should check out this free report on analyst forecasts for the company.

But note: Home Capital Group may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.

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.