Yahoo Finance NFI Group Inc. (TSE:NFI) Insiders Increased Their Holdings
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 shareholders might well want to know whether insiders have been buying or selling shares in NFI Group Inc. (TSE:NFI).
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, such insiders must disclose their trading activities, and not trade on inside information.
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'.
Check out our latest analysis for NFI Group
NFI Group Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by President of Motor Coach Business Ian Smart for CA$987k worth of shares, at about CA$14.58 per share. That means that an insider was happy to buy shares at around the current price of CA$17.83. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. Happily, the NFI Group insiders decided to buy shares at close to current prices.
Happily, we note that in the last year insiders paid CA$2.7m for 215.18k shares. But insiders sold 11.72k shares worth CA$215k. In total, NFI Group insiders bought more than they sold over the last year. They paid about CA$12.34 on average. We don't deny that it is nice to see insiders buying stock in the company. But we must note that the investments were made at well below today's share price. You can see the insider transactions (by companies and 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!
NFI Group 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.
NFI Group Insiders Are Selling The Stock
There was substantially more insider selling, than buying, of NFI Group shares over the last three months. In total, insiders sold CA$206k worth of shares in that time. Meanwhile Independent Director Phyllis Cochran bought CA$16k worth. Because the selling vastly outweighs the buying, we'd say this is a somewhat bearish sign.
Does NFI Group Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Insiders own 2.1% of NFI Group shares, worth about CA$24m. 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 Do The NFI Group Insider Transactions Indicate?
The stark truth for NFI Group is that there has been more insider selling than insider buying in the last three months. But we take heart from prior transactions. It's good to see insiders are shareholders. So we're happy enough to look past some selling. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 3 warning signs for NFI Group (1 is a bit concerning!) that we believe deserve your full attention.
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.
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. 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.
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