It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in Sun Life Financial Inc. (TSE:SLF).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.
The Last 12 Months Of Insider Transactions At Sun Life Financial
In the last twelve months, the biggest single purchase by an insider was when President of Sun Life Financial Canada Jacques Goulet bought CA$290k worth of shares at a price of CA$41.49 per share. That means that an insider was happy to buy shares at around the current price of CA$42.43. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for Sun Life Financial share holders is that insiders were buying at near the current price.
While Sun Life Financial insiders bought shares last year, they didn't sell. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Sun Life Financial is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Sun Life Financial Insiders Bought Stock Recently
It's good to see that Sun Life Financial insiders have made notable investments in the company's shares. In total, insiders bought CA$330k worth of shares in that time, and we didn't record any sales whatsoever. This could be interpreted as suggesting a positive outlook.
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Insiders own 0.03% of Sun Life Financial shares, worth about CA$8.4m, according to our data. Whilst better than nothing, we're not overly impressed by these holdings.
So What Do The Sun Life Financial Insider Transactions Indicate?
The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Sun Life Financial insiders are expecting a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Sun Life Financial. At Simply Wall St, we found 1 warning sign for Sun Life Financial that deserve your attention before buying any shares.
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 firstname.lastname@example.org. 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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