Yahoo Finance Are Insiders Too Confident In AGT Food and Ingredients Inc (TSE:AGT)?
AGT Food and Ingredients Inc. produces and exports pulses, staple foods, and food ingredients worldwide. AGT Food and Ingredients’s insiders have invested 14.58k shares in the small-cap stocks within the past three months. Generally, insiders buying more shares in their own firm sends a bullish signal. The MIT Press (1998) published an article showing that stocks following insider buying outperformed the market by 4.5%. However, it may not be sufficient to base your investment decision merely on these signals. Today we will evaluate whether these decisions are bolstered by analysts’ expectations of future growth as well as recent share price movements. See our latest analysis for AGT Food and Ingredients
Who Are Ramping Up Their Shares?
Over the past three months, more shares have been bought than sold by AGT Food and Ingredients’s’ insiders. In total, individual insiders own over 4.15 million shares in the business, which makes up around 17.13% of total shares outstanding.
Does Buying Activity Reflect Future Growth?
From the outside, AGT Food and Ingredients’s future looks hopeful. Delving deeper into the line items, AGT Food and Ingredients is expected to experience a double-digit top-line growth over the next year, which seems to drive higher expected earnings per share growth as well. This could indicate significant cost-cutting activities or a high degree of economies of scale which may have a compounding impact in the future. If insiders recognised this, a signal of their confidence may be their higher shareholdings in the company. Or they may simply view the share price is currently too low compared to the share’s intrinsic value.
Did Insiders Buy On Share Price Volatility?
Alternatively, the timing of these insider transactions may have been driven by share price volatility. This means, if insiders believe shares were heavily undervalued recently, this would provide a prime opportunity to buy more irrespective of its growth outlook. In the past three months, AGT Food and Ingredients’s share price reached a high of CA$16.96 and a low of CA$14.94. This indicates a relatively insignificant share price movement, with a small change of 13.52%. This could indicate insider transactions are not driven by share price changes but perhaps due to their belief of the company’s growth prospects or just personal portfolio re-weighting.
Next Steps:
AGT Food and Ingredients’s insider meaningful buying activity tells us the shares are currently in favour, however, earnings expectations tell a different story, and the share price movement may be too trivial to cash in on any mispricing. However, while insider transactions could be a helpful signal, it is definitely not sufficient on its own to make an investment decision. I’ve compiled two important factors you should further examine:
Financial Health: Does AGT Food and Ingredients have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Other High Quality Alternatives : Are there other high quality stocks you could be holding instead of AGT Food and Ingredients? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing!
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
