It is not uncommon to see companies perform well in the years after insiders buy shares. 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 before you buy or sell Cascades Inc. (TSE:CAS), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. 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. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
The Last 12 Months Of Insider Transactions At Cascades
Co-Founder Bernard Lemaire made the biggest insider sale in the last 12 months. That single transaction was for CA$6.2m worth of shares at a price of CA$15.48 each. While the sale doesn’t make us feel confident, we do note it was conducted at a price well above the current share price, which is CA$9.54. So it may not shed much light on insider confidence at current levels.
Happily, we note that in the last year insiders paid CA$3.5m for 295.25k shares. But insiders sold 450.00k shares worth CA$6.9m. In total, Cascades insiders sold more than they bought over the last year. The sellers received a price of around CA$15.23, on average. Insider selling doesn’t make us excited to buy. But we note that the selling, on average, was at well above the recently traded price of CA$9.54. You can see a visual depiction of insider transactions over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
Cascades 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.
Insiders at Cascades Have Bought Stock Recently
Over the last quarter, Cascades insiders have spent a meaningful amount on shares. Overall, 3 insiders shelled out CA$1.3m for shares in the company — and none sold. This could be interpreted as suggesting a positive outlook.
Does Cascades Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Cascades insiders own about CA$313m worth of shares (which is 29% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At Cascades Tell Us?
It is good to see recent purchasing. However, the longer term transactions are not so encouraging. Overall, we’d prefer see a more sustained buying from directors, but with a significant insider holding and more recent purchases, Cascades insiders are reasonably well aligned, and optimistic for the future. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course Cascades may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
To help readers see past 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. For errors that warrant correction please contact the editor at email@example.com.